China's yuan nabs fifth place in world's most used currency

China's yuan beat Canada and Australia, but still lags behind US dollar, euro, pound and even Japanese yen

Chinese currency, the yuan, has taken the world’s fifth spot in the international payment league tables, beating Canada and the Australian dollar, The Telegraph reported.

In terms of global payments, the Chinese currency has been responsible for 2.17%, according to transactions company Swift. Interestingly, even though China is the world’s second largest economy, its currency is not easily tradeable compared to other currencies.

Even though it managed to beat Canada and Australia, it still lags behind the US dollar, euro and pound. However, it is very close to the Japanese yen which has been accountable for 2.69% of transactions.

Swift also stated that the Chinese currency rose in value by 20.3% in December as compared to a year before, and its ascent denotes its superiority in the country’s economic hike.

The yuan was responsible for 1.1% of total foreign exchange turnover, according to a survey published in 2013 by the Bank of International Settlements – a time during which the currency held the 9^th place in the world.

“It is a great testimony to the internationalisation of the yuan and confirms its transition from an 'emerging' to a 'business as usual' payment currency,” Swift’s head of banking Wim Raymaekers said.

The yuan’s ascent has been credited to its increase in offshore clearing centres worldwide.

While the Chinese currency’s payments grew by 102%, other currencies only stood at 4.4% in 2014.

Moreover, with the IMF soon to update is Special Drawing Rights currency basket this year (review on the basket is conducted every five years only and currencies included so far have only been the US dollar, euro, the pound and the yen), the official reserves could possibly include the yuan.