HONG KONG: China’s yuan has joined the ranks of the most traded currencies for the first time, underlining the growing might of the country’s economy, the world’s second-largest.
The yuan became one of the top 10 traded currencies in 2013, rising to No. 9 on the list due to a “significant expansion” in offshore trading, the Bank for International Settlements said in a report. It’s a sharp jump from the bank’s last survey in 2010, when the yuan was No. 17 on the list.
Turnover in trades involving yuan surged to $120bn a day on average in April 2013, three and half times more than the $34bn in 2010. Still, that figure is dwarfed by the dollar, which accounted for about $4.7 trillion daily. The BIS, which is an international organization of central banks, said the yuan along with the Mexican peso, which rose to No. 8, “saw the most significant rise in market share among major emerging market currencies.”
The yuan is not yet fully convertible but Beijing has been gradually loosening controls. It has started allowing companies to settle international transactions in yuan, signed currency swap deals with Pakistan, Thailand South Korea and others and has worked with financial centres such as London and Hong Kong to develop international hubs for offshore trading of the currency.
AP
