CNY- Chinese Yuan set best month since 2012 as global usage increases

Published: 30 Apr at 4 PM Tags: Dollar, America, UK, Australia, USA, China,

The Chinese Yuan is heading for its biggest gain since January 2012 on expectations that the Chinese currency will appreciate as it becomes more widely used in trade and global investment.

According to the Society for Worldwide Interbank Financial Telecommunication, global Yuan payments have increased by 32.7% in March compared to the previous month. The currency also received a boost from the Hong Kong monetary authority after it said that the value of trade settled by using the Chinese currency but the city’s banks has risen by 45% from the previous year to 830 billion Yuan or $135 billion.

Several economists have recently said that the Yuan will eventually become a feasible currency for the Hong Kong Dollar to peg its currency against, in place of the US Dollar.

“The Yuan is likely to gain further when its trading band is widened,” said Patrick Cheng, foreign-exchange analyst at Haitong International Securities Co. in Hong Kong. “Growing demand for Yuan as an investment and reserve currency will also support the exchange rate.”

Several international Central Banks have announced plans to use the Chinese currency including the UK and most recently Australia, who’s Central Bank, said that it plans to put around 5% of its foreign-exchange reserves in China.

The onshore spot rate appreciated 0.74 percent this month, the best performance since October. In Hong Kong’s offshore market, the currency advanced 0.7 percent, the biggest gain in six months. It’s steady today, after earlier touching a record 6.1592.

As of Tuesday, 30th April 2013, the Pound Sterling currency rates mentioned within this news item were as follows:

GBP USD exchange rate was 1.5531, GBP AUD exchange rate was 1.4974, and GBP CNY exchange rate was 9.575.

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