THE yuan is making deeper inroads as a currency of choice for cross-border payments, with global transactions climbing last month to their highest level since January 2016.

Payment activity in the renminbi (RMB), as the currency is also known, jumped from a year earlier, according to data from the Society for Worldwide Interbank Financial Telecommunications (SWIFT), which handles cross-border payment messages for more than 11,000 financial institutions in 200 countries and regions.

Despite the increase, the yuan accounts for about 2.4 percent of the market versus the U.S. dollar at 38 percent. The U.S. dollar maintained its top spot in the ranking, although its share slipped from the previous month. The euro followed with 37 percent, while the pound remained in third. The yen rounded out the top four.

Value of RMB payments increased 21.34 percent last month compared with that of December 2020, while in general all payments currencies decreased by 5.86 percent, according to SWIFT.

Hong Kong is the largest market for offshore RMB transactions, taking up 75.93 percent, followed by Britain, Singapore and the United States, SWIFT said.

SWIFT releases the data in its monthly RMB Tracker on the yuan’s progress toward becoming an international currency. The Chinese currency was ranked 35th in October 2010, when SWIFT started tracking currencies. It progressed to the top six in 2014, where it has generally averaged slightly less than a 2 percent share globally. It has managed to retain the fifth spot in the past three months.

Turnover for the yuan versus the dollar in London, the world’s biggest currency hub, rose to a record US$84.5 billion in October, according to data from the Bank of England. That was up 56 percent from April 2020. (SD-Agencies)