China’s currency overtakes EUR and JPY in trade finance deals
According to WSJ Wall Street Journal, the Chinese currency is more used to finance trade deals than the EUR and JPY
China’s currency was employed by importers and exporters for 8.7 % of their financing agreements with trade partners in October (+ 4.4 %). According to Swift the financial service institution that monitors international currency flows. Therefore China’s currency ranks second behind the USA (its share amounts to 81 %) for trade financing, these include letters of credit guarantees issued between two companies and covering future payment date for specific goods.
WSJ’s Nicole Hong wrote: “While these trade guarantees are a sliver of the USD 5.3 trillion a day foreign exchange market, the rapid adoption of the Yuan is part o China’s efforts to boost the currency’s role on the international stage. In September, the Bank for International Settlements stated that the Yuan had cracked the top 10 most traded currencies for the first time, leaping to ninths place from 17th in 2010. Daily trading in Yuan tripled to USD 12 billion in the same period.