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China’s Yuan Joins Top 4 Global Currencies

The Chinese yuan became the fourth most-used currency for cross-border payments in August, according to global transaction services organization SWIFT. It’s the first time, the yuan has moved ahead of the Japanese yen.

There was a “substantial” increase in the use of the Chinese currency in the final week of August, and came on the back of market volatility, according to a report by SWIFT. This was caused by concerns over the Chinese economy slowing down and Beijing’s devaluation of the yuan, the report added.

Data shows the yuan was used far less in global payments than the US dollar, the euro and the British pound. In August 2012 the yuan was twelfth on SWIFT’s list.

The yuan was used in 2.8 percent of global payments in August, compared with 44.8 percent for the dollar, 27.2 percent for the euro and 8.5 percent for the British pound.

More than 100 countries used the yuan for payments in August, with over 90 percent concentrated in 10 countries. Most of those payments have been processed in Singapore (24.4 percent) and the United Kingdom (21.6 percent). Worldwide payments in the yuan were up 14 percent from a year earlier, and have been provided by more than 1,700 financial institutions.