SHANGHAI: Europe now represents 10 percent by value of global payments in China’s currency, transactions organization Swift said Tuesday, as more countries seek a greater share of yuan business through new clearing arrangements.
Although China’s special administrative region of Hong Kong is the dominant center for offshore yuan trading, four European countries are in the top ten, said the Society for Worldwide Interbank Financial Telecommunication.
They are Britain, France, Germany and Luxembourg, it said, all of which have reached agreements with China’s central bank for yuan-clearing in their countries.
Over the past year Britain’s yuan payments have surged nearly 124 percent, France has jumped almost 44 percent, Germany has soared 116 percent and Luxembourg gained around 42 percent, the organization said in a statement, although it gave no values.
China is trying to make the yuan, also known as the renminbi (RMB), used more widely internationally in line with its standing as the world’s second largest economy.
It has agreed RMB clearing centres in several European countries over the past year. In the statement Michael Moon, Swift’s head of payments and RMB for the Asia-Pacific, said the announcements “have boosted the RMB trading activities in these countries”.Last month the yuan remained the seventh most used global payment currency — unchanged from June — with a 1.57-percent share, Swift said.
China keeps a tight grip on the value of its currency and limits capital flows into and out of the country due to fears they could disrupt the economy.
But authorities have tried to further liberalize the yuan’s movements and create a more market-oriented exchange rate.