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Chinese yuan is most actively traded emerging market currency -BIS

Published 01/09/2016, 11:00 pm
Updated 01/09/2016, 11:10 pm
© Reuters.  Chinese yuan is most actively traded emerging market currency -BIS
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By Anirban Nag

LONDON, Sept 1 (Reuters) - The Chinese yuan has overtaken the Mexican peso as the most actively traded emerging market currency, reflecting China's growing influence on the global economy, a survey of the foreign exchange industry showed on Thursday.

The yuan CNH= CNY= or renminbi was the world's eighth most actively traded currency overall, moving up from the ninth position in 2013, according to the Bank for International Settlements' triennial survey of forex activity.

The average daily turnover of renminbi almost doubled, from $120 billion to $202 billion, between April 2013 and April 2016, representing a rise in its share of global turnover to 4 percent from 2 percent, the BIS said.

"Ninety-five per cent of renminbi turnover is due to trading against the U.S. dollar. The average turnover of dollar/yuan rose from $113 billion to $192 billion over the three-year period," the survey said.

The surge in trading in the yuan comes as China, the world's second largest economy after the United States, presses ahead with efforts to internationalise the yuan and make it more easily available for trading.

The International Monetary Fund's admission last year of the yuan into its benchmark currency basket has also meant that Chinese unit will make up a 10 percent share of global central bank reserves.

The yuan's rise supports recent data from banking network SWIFT that shows that it is now the fifth most-used currency for international payments. The big bank-to-bank trading platforms have also reported a surge in its usage.

The BIS survey also showed that several other emerging market currencies, particularly from the Asia-Pacific region, gained market share. The Korean won KRW= , Indian rupee INR= and Thai baht THB= were among the currencies that advanced in the ranking by two or three places apiece.

In contrast, the turnover of some emerging market currencies -- notably the Mexican peso and Russian rouble -- peaked in 2013 and has since exhibited a significant decline. That was broadly in line with a drop in commodity and oil prices during that three year period which made both the peso and the rouble less attractive currencies to buy.

Among the other heavily traded advanced economy currencies, the commodity-linked Australian dollar AUD= lost market share along with the Swiss franc CHF= . In contrast, sterling GBP=D4 , the Canadian dollar CAD= , Swedish krona SEK= and Norwegian crown NOK= gained share in global FX turnover.

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