Yuan Surpasses Yen As 4th Most-used Currency For Payments

The Chinese yuan became the world's fourth most-used currency for international payments in August, overtaking the Japanese yen, according to a report released by the Society for Worldwide Interbank Financial Telecommunication on Tuesday. SWIFT data showed 2.79% of international payments were settled in yuan, overtaking the yen's 2.76%. The increase is remarkable because the People's Bank of China devalued the yuan on Aug. 11, causing it to shed to shed 3% of its value against the dollar. The milestone was reached at a crucial time for the renminbi. Chinese policy makers have been lobbying the International Monetary Fund to add the yuan to its special drawing rights basket. Inclusion in the basket would confer the status of reserve currency on the yuan -- a label Chinese policy makers have pursued for years. One of the criteria for inclusion in the basket is that the currency be widely used for international payments. The yen, which the yuan overtook, is one of the four currencies currently included in the basket. The other three are the U.S. dollar, British pound and the euro. The yuan recently traded at 6.36 yuan to the dollar, down 2.5% on the year.

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