The Chinese yuan has overtaken the Australian and Canadian dollars, as well as the Swiss franc, to become the world’s fifth most traded currency, the Bank for International Settlements (BIS) reported.
The use of the Chinese currency increased by 7% of all foreign exchange transactions in 2022, up 3% from 2019, according to the Triennial Central Bank Survey of Foreign Exchange and Non-Standardized Derivatives Markets.
Meanwhile, total daily trading volume increased by 14 % to $7.5 trillion.
The world’s most widely used currency for international payments continued to be the US dollar, with a share of 88% of all transactions in April. The euro remained in second place, but its share fell slightly to 31 %, compared with 32 % three years ago. The British pound and Japanese yen were third and fourth, respectively.
Bloomberg says the increase in cross-border yuan settlements, as well as the higher share among global foreign exchange reserves, is due to Beijing’s moves to open up its financial markets.
The BIS survey covered more than 1,200 banks and other intermediaries worldwide. Russia, which accounted for less than 1% of the global total in 2019, was excluded this year, while Dubai was included for the first time.