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China's yuan joins world's most traded currencies

business Updated: Sep 06, 2013 13:17 IST

A report says China's currency, the yuan, has joined the ranks of the world's most traded currencies for the first time.

The Basel-based Bank for International Settlements said in a report Thursday that the yuan became one of the top 10 traded currencies, driven by a big rise in offshore trading.

The rise of the yuan in foreign exchange markets highlights the growing power of China's economy, the world's second largest.

Turnover in trades involving yuan surged to $120 billion a day on average in 2013 from $34 billion in 2010, when the last survey was done. Still, that figure is dwarfed by the dollar, euro and yen.

China's leaders want the yuan, which is not yet fully convertible, to become an international currency and have been promoting its use.

A Wall Street Journal report says: "Yuan gains highlight China's ambitions to play a larger role in a market long dominated by the dollar and, to a lesser extent, the euro. Daily global currency flows have risen more than 30% in three years. The yuan ranked 17th in the previous BIS survey, in 2010. The shift also highlights the international nature of the manufacturing supply chain and the flexibility U.S.-based firms can gain by."

"As China starts loosening up its banking regulations, companies will eventually see the renminbi on par with the euro," said Anil Sawrup, a senior vice president at currency-exchange firm Cambridge Mercantile Group, according to the WSJ report.

"Now that it's in the top 10, more businesses will realize the urgency of making payments in the Chinese currency," Sawrup said.