BOFIT Viikkokatsaus / BOFIT Weekly 2016/36

The latest currency market survey from the Bank for International Settlements (BIS) found that the yuan was involved on one side in 4% of all forex trading in April 2016. The yuan now ranks as the eighth most traded currency, up from eleventh place in 2013. The yuan surpassed the Mexican peso, making it now the most traded emerging-market currency. BIS noted that the daily volume of forex markets was $5.1 trillion in April. The US dollar was used in 88 % of actual trades, while the euro’s share fell a couple percentage points from the previous survey to 33 % (as the method used tracks both sides of the transaction, the total percentage adds up to 200 %).

The Society for Worldwide Interbank Financial Telecommunication (SWIFT) reports monthly on the use of currencies in international payments. The July report found that 2 % of cross-border payments globally were conducted in yuan, placing it in fifth place just behind the Japanese yen among world’s most important currencies in international payments. The rankings were led by the US dollar (41 %), euro (31 %), British pound (8 %) and Japanese yen (3 %).

The role of the Russian ruble in forex trading and in international payments has declined in recent years. BIS reports that the ruble today is involved in only 1 % of forex trades and that its ranking has declined from 12th place three years ago to 18th place at present. The ruble has failed to make it into the SWIFT top 20 currencies since spring 2015.