The Chinese yuan surpassed the euro Tuesday, making it the second most-used currency in trade finance.
The announcement was made by Society for Worldwide Interbank Financial Telecommunication (SWIFT), a global transaction services group.
The yuan’s share of letters of credit and collections, referred to as renminbi (RMB), increased to 8.66 percent in October, easily beating the euro’s posting of 6.64 percent, AFP reported.
"The RMB is clearly a top currency for trade finance globally and even more so in Asia," said Franck de Praetere, Asia Pacific head of payments and trade markets for SWIFT.
The territories that have been causing the yuan to surge in the trade finance world include China, Hong Kong, Singapore, Germany and Australia.
The yuan held only 1.89 percent of market share at around this time last year.
“The RMB remained the 12th payments currency of the world, with a slightly decreased share of 0.84 percent compared with 0.86 percent in September,” Reuters reported.
“RMB payments increased in value by 1.5 percent in October, while growth for all payments currencies was at 4.6 percent,” it adds.
Of course, at an impressive 81.08 percent share of letters of credit and collections, the U.S. dollar remains the world's leading currency.
Still, the yuan’s increased importance in trade finance comes at a time when China, the world’s second-biggest economy, has been working hard to increase its standing in the global economy.
To that end, AFP reported, Chinese authorities “have pledged to loosen controls over interest rates and to further open up its capital account on a trial basis in a new free trade zone in Shanghai.”
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