THE yuan slipped one place to the third most active currency for global trade finance, overtaken by the euro, partly due to slowing growth in the world’s second-biggest economy, global transaction service provider the SWIFT said yesterday.

    The rapid cooldown in China over recent years was also a factor in the yuan moving one notch down to sixth most used world payment currency, with the Canadian dollar nudging ahead to fifth place.

    The yuan’s usage by value in traditional trade finance — letters of credit and collections — has been decreasing since 2014. Its market share fell to 4.61 percent from 8.66 percent three years ago when it was the second most active currency in trade finance after the U.S. dollar, according to the SWIFT.

    Since October 2013, trade finance values in the yuan have decreased by 66 percent, whilst trade finance across all currencies decreased in value by 35 percent.

    “The general slowdown of the Chinese and world economies over the past few years has impacted global trade growth across all currencies, not just the yuan,” said Michael Moon, Asia Pacific head of Payments Markets at the SWIFT.

    “On a positive note, the inclusion of the yuan in the Special Drawing Right (SDR) basket should generate further trust and confidence in the yuan currency and support further yuan internationalization.”

    In terms of international payments, compared with September 2016, the yuan has dropped one position to the sixth for international payments in October, with a share of 1.67 percent. The Canadian dollar, with a share of 1.82 percent, pulled up to fifth place.

    The decrease in the yuan’s international payments usage was likely due to seasonal effects following the Golden Week holiday in China in October, the SWIFT said.(SD-Agencies)