“The Rise of Yuan: China’s Currency Ousts US Dollar as Top Choice for Cross-Border Transactions in 2023”

CNN Indonesia

Thursday, 27 Apr 2023 18:02 WIB

Jakarta, CNNIndonesia —

chinese Currency, yuanfinally managed to eject dollar AS as the currency most widely used for cross-border transactions (cross-border) in March 2023.

This increasingly reflects the efforts of the Bamboo Curtain country to internationalize the use of yuan with sweet fruit.

Reported from Reuters, data from the State Foreign Exchange Administration noted cross-border payments and receipts in yuan rose to a record US$549.9 billion this March. This figure is higher than the previous month, which was only US$434.5 billion.

Now, the Yuan controls 48.4 percent of the use of the currency used in global transactions. Meanwhile, the US dollar had to be content with a controlling portion of 46.7 percent. The cross-border transaction volume includes current accounts and capital.

China has long promoted the use of the yuan in cross-border trade as part of efforts to internationalize the use of its currency.

Data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) showed that the share of the yuan in global currency transactions for trade financing rose to 4.5 percent in March. Meanwhile, the US dollar accounted for 83.71 percent.

The most recent country to choose the yuan as a means of cross-border transactions is Argentina. The country has committed to start paying for imports from China in yuan instead of US dollars.

In April, Argentina plans to pay US$1 billion worth of Chinese imports in yuan. Furthermore, about US$790 million of monthly imports will also be paid for in yuan. Argentina’s Economy Minister Sergio Massa said the decision was aimed at easing dollar outflows.

The decision also comes as the South American nation is battling a critical level in its dollar reserves, amid a sharp drop in agricultural exports due to the drought. Another trigger, political uncertainty ahead of this year’s elections.

In November last year, Argentina expanded its currency exchange with China by US$5 billion. This is an effort to strengthen Argentina’s foreign exchange reserves.

(mrh/pta)