Market News

(Bloomberg) — Global trading of the Chinese yuan has surged to $817 billion a day, extending a decade-long trend with volumes nearing those of the British pound, according to the Bank for International Settlements.

The yuan now makes up 8.5% of global currency transactions, up from 7.0% in 2022, according to the BIS’s triennial survey. While it remains the fifth-most traded currency, it closed the gap with fourth-placed sterling, whose share fell from 12.9% to 10.2%.

Chinese officials have been trying to boost the currency’s global appeal for years. They have eased some capital controls as part of those efforts, aiming to chip away at the dominance of the US dollar.

“The yuan is rapidly closing in on the pound, as China’s push to internationalise its currency shows progress,” said Moh Siong Sim, FX strategist at Bank of Singapore. “Challenges — such as restriction on cross-border capital flows — remain in unseating the USD’s global dominance,” he added.

Still, gauges of the yuan’s international usage have sent mixed signals this year. For example, its share as a global payment currency in transactions recorded at the Society for Worldwide Interbank Financial Telecommunication, or SWIFT, was 2.9% in August. That’s down from 4.7% in the same month last year.

Another big gainer in the BIS survey was the Swiss franc, where daily trading rose to $612 billion — leapfrogging both the Australian and Canadian dollars to become the sixth most-traded currency. The Hong Kong dollar’s share also increased notably from 2.6% to 3.8%.

—With assistance from David Finnerty.

(Adds quote from Bank of Singapore)