SHANGHAI: China’s yuan has dropped to seventh place among the world’s payments currencies, global transactions organisation SWIFT said on Monday, even as Beijing tries to push greater international use of the unit.
The yuan — also known as the renminbi — held a 1.81 percent share in world payments based on value in February, SWIFT said in a statement on Monday, down from 2.06 percent in January, when it stood in fifth place.
The Swiss franc and the Canadian dollar overtook the Chinese currency last month, SWIFT data showed.
It attributed the weaker showing to the “seasonal effect” of the Chinese New Year, when business slows because of a week-long holiday.
But the demotion also comes amid mounting worries over China’s slowing economy, though officials have denied strong capital outflows.
China keeps a tight grip on the value of the yuan out of concerns that unpredictable currency inflows and outflows could harm the economy and weaken its financial control.
At a meeting with senior Chinese officials in Beijing, US Treasury Secretary Jacob Lew urged them to ease the restrictions.
“It is critical that China continue to move to a more market-determined exchange rate and a more transparent exchange rate policy,” Lew said.
“We look forward to working with China as it continues to deepen its financial reforms and
becomes more integrated into, and assumes greater responsibility in, the global financial system.”
Beijing is seeking to make the yuan used more internationally in line with its standing as the world’s second-largest economy. Some analysts predict the unit will one day rival the US dollar.
Although the yuan is not freely convertible, China is in talks with the International Monetary Fund for the Washington-based institution to add the yuan to its basket of reserve currencies.
Hong Kong, a special administrative region of China which is considered the business gateway to the mainland, handles more than 70 percent of global payments in yuan, SWIFT said, but the share of other countries is growing.
“Broader support by more countries beyond Hong Kong, underlining its international use, suggests the potential for future clearing centres and further development of the currency,” Michael Moon, head of payments for Asia-Pacific at SWIFT, said in the statement.