Chinese yuan surpasses Japanese yen in global payments share, SWIFT says

The Chinese yuan overtook the Japanese yen to rank fourth in international payments in November for the first time since early 2022, according to transaction data compiled by the Global Remittance System (SWIFT).

Yuan-denominated trades, as a share of all currencies, rose to 4.6% last month from 3.6% in October. This was the highest level recorded for the yuan, surpassing the yen, which recorded 3.4%.

The last time the yuan ranked fourth was in January 2022. The US dollar retained the lead in November at 47%, followed by the euro and the pound sterling at 23% and 7.15%, respectively.

Major global banks use the Universal Interbank Financial Communication Association (SWIFT) system to communicate with each other and facilitate interbank currency transactions.

The system began collecting data in 2010, but the numbers since July reflect a technical upgrade to how SWIFT tracks data based on newly revised trading reporting standards.

SWIFT notes that 80% of cross-border yuan transactions (excluding China) took place through Hong Kong. Other major foreign exchange centers of the yuan include the United Kingdom, Singapore, and the United States.

Meanwhile, the Chinese currency’s share in trade-finance-related transactions stood at 5.7% in November, much lower than the dollar but higher than the euro.