Global use of the Renminbi dropped sharply in February, reversing a 5 year trend of gaining traction in the global rankings of currencies used for payments by Swift.
Accounting for just 1.76% of payments in February, down from 2.45 per cent in January, early warning signs of stagnation for China looking to internationalize the Renminbi. More worryingly, this months 1.76% reading is the lowest reading since October 2014.
More worryingly, the Renminbi only just held on to its global ranking of 5th this month, notching above the Canadian dollar’s 1.73%. Having jumped from 14th in February 2013 to 8th a year later, the currency has settled on being the 5th most used currency globally since March 2015.
Also notable is the increasing share of the Japanese Yen, rising sharply as the Bank of Japan adopted a negative interest-rate policy. Will we see an unwind of the Yen-based carry trade?