The renminbi has overtaken the euro to be the second most-used currency in trade finance, accounting for 8.66 percent of activity in October, according to a statement Tuesday from financial cooperative SWIFT. The Chinese currency ranked fourth in January 2012 with a 1.89 percent share.
The top five economies that used renminbi for trade finance in October this year were China, Hong Kong, Singapore, Germany and Australia. Singapore took up 12 percent of the total renminbi value sent and received in the world while Germany and Australia accounted for 2 percent each.
As a payment currency, the RMB remains stable in 12th spot globally, trailing the euro, Japanese yen, and the Australian, Canadian, Hong Kong and Singapore dollars, among others. The Chinese unit was in 20th place in payments in January last year, according to Belgium-based SWIFT, which provides transaction messaging platforms for banks, brokerages and corporates.
The improvement in the Chinese currency’s ranking in world trade finance was helped by an increase in renminbi financing channels after clearing banks were set up in Singapore and Taiwan, observers say.
Foreign merchants are willing to borrow renminbi to pay for Chinese goods as they believe the Chinese currency will not appreciate a lot in the coming few years due to the Fed’s potential tapering of its quantitative measures.
However, it will take some more years for the renminbi to become the second largest payment currency as not many foreign companies are willing to keep the Chinese unit in their bank accounts due to lack of related investment tools in the global markets, observers say.
China seeks WTO dispute settlement with US
China has filed a complaint over anti-dumping measures by the United States against 13 types of Chinese products, Xinhua news agency reported Tuesday, citing the Ministry of Commerce. Beijing called for talks with the US under the dispute settlement procedure of the World Trade Organization. It accused Washington of inappropriately applying the anti-dumping measures, denying companies separate tax rates and using unfavorable facts. These have seriously damaged the legitimate interests of Chinese companies and domestic industries, ministry spokesman Shen Danyang said.
CSRC to allow foreigners into domestic futures firms
The China Securities Regulatory Commission (CSRC) will allow foreign capital to be invested in domestic futures companies, and will encourage local players to develop futures brokerage operations overseas, Xinhua reported, citing CSRC vice chairman Jiang Yang . Reform of the domestic futures market has led to the successful launch of trial schemes for gold and silver futures night trading. The CSRC will continue to supervise the development of the futures and derivatives industry, Jiang was quoted as saying.
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