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(Kitco News) The yuan became the most-used currency in China's cross-border payments in March, surpassing the U.S. dollar for the first time, Reuters cited official data. This development aligns with China's plans to increase the use of the yuan internationally.
Yuan cross-border transactions and receipts were at a record of $549.9 billion last month, up from February's $434.5 billion, Reuters referred to the numbers released by the State Administration of Foreign Exchange.
The yuan-based transactions represented 48.4% of all cross-border payments. In comparison, the dollar-based transactions fell to 46.7% in March from 48.6% in February.
"The rise in yuan usage could be a natural consequence of China opening up its capital account, with rising inflows for China bonds and outflows for Hong Kong stocks," Stephen Chiu, chief Asia foreign-exchange and rates strategist at Bloomberg Intelligence, said in a note.
China has been on a mission to expand the use of the yuan internationally.
But according to SWIFT's data, the yuan has a long way to go, with its share of global currency transactions representing 4.5% in March, while the dollar's share is at 83.71%.
In the meantime, Russia's Finance Minister Anton Siluanov spoke about using national currencies in trade settlements, adding that 70% of trade between China and Russia is now being settled in yuan and rubles.
Siluanov cited the risk of Western sanctions when using "reserve" currencies of the world. "The use of national currenc[ies] is our priority since, as the president correctly said, it was not we who left the dollar, but the dollar left us, because settlements in dollars became dangerous," RIA Novosti quoted him as saying at an event Monday.
