RMB Becomes 4th Largest Payment Currency in the World

According to the “2022 RMB Internationalization Report” released by People’s Bank of China a few days ago, since 2021, RMB cross-border revenue and expenditure have continued to grow on the high basis of the previous year. In 2021, the total amount of cross-border RMB receipts and payments by banks on behalf of customers was 36.6 trillion yuan, an increase of 29.0% year-on-year, and the number of receipts and payments hit a record high. The total cross-border revenue and expenditure was 404.47 billion yuan. According to the Society for Global Banking and Financial Telecommunication (SWIFT), the renminbi’s share of international payments rose to 2.7% in December 2021, overtaking the yen to become the world’s fourth-largest payment currency and rising to an all-time high of 3.2% in January 2022.

According to official foreign exchange reserve currency composition (COFER) data released by the International Monetary Fund (IMF), in the first quarter of 2022, the renminbi accounted for 2.88% of global foreign exchange reserves, an increase of 1.8 percentage points from when the renminbi first joined the special drawing right (SDR) basket in 2016, ranking fifth among major reserve currencies.

At the same time, the cross-border RMB settlement volume related to the real economy has maintained rapid growth, commodities, cross-border e-commerce and other fields have become new growth points, and cross-border two-way investment activities continue to be active. The RMB exchange rate generally shows a two-way fluctuation trend, and the endogenous demand of market participants to use RMB to avoid exchange rate risks is gradually increasing. The basic systems of RMB cross-border investment and financing, transaction settlement and so on have been continuously improved, and the ability to serve the real economy has been continuously enhanced.

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