On September 28, the Society for Worldwide Interbank Financial Telecommunication (Swift) released the global payment currency rankings based on amount statistics for August 2023. Among the top five most active currencies, the US dollar continued to maintain a strong rise, European currencies performed poorly, and the euro continued its downward trend, becoming the biggest loser. The pound sterling payment share fell slightly from July, while the yen share increased from the previous month.

The performance of the RMB was particularly outstanding, with its payment share exceeding 3% of global payments for the third time since SWIFT records began, breaking the 2015 record to set a new high.

The dollar's position remains strong

In August 2023, the U.S. dollar continued to maintain its position as the world's most active currency, with a payment share of 48.03%, a sharp increase of nearly 1.6 percentage points from the previous month. It performed very strongly and accounted for almost half of the global currency payment market.

Although the "de-dollarization" process is in full swing in many countries around the world, emerging markets' dependence on the US dollar in trade settlement and foreign exchange reserves is on a downward trend.

It's just that a lean camel is bigger than a horse, not to mention that the United States is not on the decline yet. It is still the world's largest economy, with a solid economic foundation, strong military power, technological leadership, and huge influence on a global scale. The vast majority of commodities are priced in US dollars. All of the above provide strong support for the credit of the US dollar. Although it is not a "world currency" in name, the US dollar already has some attributes of a "world currency", which brings tangible benefits to the United States.

At the same time, the United States is in a cycle of interest rate hikes, the U.S. dollar interest rate is rising rapidly, and the U.S. dollar index continues to rise, attracting global capital inflows. The frequency and amount of U.S. dollar transactions in the financial field are expanding, so it is not surprising that the proportion of U.S. dollar payments has increased.

The euro continued to perform poorly, the pound was affected, and the yen's share increased slowly

In August 2023, the euro's share of international payments was only 23.22%, and the pound sterling's share was 7.14%. Although they continued to maintain their status as the second and third most active currencies, they both declined month-on-month, especially the euro's share, which continued to decline. In 2021, it was still hovering around 38%, and now it is close to the 20% mark. It has completely lost the dominance it had in the past to compete with the US dollar.

The payment shares of major currencies in the world are in a relationship of increase and decrease. The increase in the share of the US dollar is taking over the share of the euro, which has been the "eternal runner-up". The Federal Reserve's interest rate hike has created a strong dollar, and it has coincided with the instability brought about by Europe's geopolitical conflicts. The European economy is in recession, the euro exchange rate has depreciated sharply, and a large amount of European capital has poured into the United States for risk aversion. Whether it is the transfer of real industries or financial capital for risk aversion, Europe has been severely damaged and the share of euro payments has plummeted.

The British economy, also in Europe, has also performed poorly. The relationship between the British and the European Union is "prosperity and loss together". The eurozone economy is in recession, and it is difficult for the UK to remain immune. In July this year, the UK's GDP growth rate fell by 0.5% month-on-month, and the shrinkage rate reached the fastest since December 2022. Such a pound is obviously not reassuring.

The depreciation of the Japanese yen is a commonplace. The Japanese yen is the worst performing currency among the world's top ten currencies this year. From the beginning of the year to now, the dollar has risen by 13% against the Japanese yen. Although the depreciation of the Japanese yen can drive up inflation and benefit exports, the rising import costs and huge pressure on national debt have squeezed the yen's share in the international payment market.

The share of RMB has increased for seven consecutive months, breaking the historical record

The US dollar stands out, while the currencies of other developed economies still have strength. In August 2023, the US dollar, euro, pound sterling and yen occupied four of the world's top five most active currencies. The renminbi continued to maintain its position as the world's fifth most active currency, with its share rising to 3.47%, up 0.41 percentage points from July, and remaining above 3% for two consecutive months.

Prior to this, the proportion of RMB in global payments from January to July 2023 was 1.91%, 2.19%, 2.26%, 2.29%, 2.54%, 2.77% and 3.06% respectively. Since the beginning of this year, the proportion of RMB in global payments has maintained an upward trend for 7 consecutive months.

At the same time, this is the third time in recorded history that the RMB has accounted for more than 3% of global payments. The 3.47% share also broke the historical record of 3.2% set in January last year.

In recent years, the internationalization of the RMB has made encouraging progress. Cross-border trade settlement has become increasingly convenient with the strong support of the Cross-Border Payment System (CIPS). Local banks in many emerging countries have joined the Cross-Border Payment System (CIPS) to carry out RMB settlement business, and RMB settlement in international trade has become increasingly popular.

As of the end of September 2023, there were 1,478 participants in the CIPS system, including 101 direct participants and 1,377 indirect participants.

Among the indirect participants, there are 1,018 in Asia (564 domestically), 240 in Europe, 50 in Africa, 30 in North America, 22 in Oceania, and 17 in South America, distributed in 111 countries and regions around the world. The actual business covers more than 4,300 corporate banking institutions in 182 countries and regions around the world.

On the other hand, China is the world's second largest economy. Its economy has recovered rapidly this year, and its growth rate ranks among the top in the world. Except for a slight depreciation against the US dollar, it has appreciated against a basket of non-US currencies. The exchange rate is very strong, and its safe-haven properties have been greatly enhanced.

In addition, China continues to open up to the outside world at a high level, the size of the offshore RMB market continues to expand, and emerging market countries' willingness to reserve RMB is rising, attracting overseas companies to use RMB more in trade scenarios, and Chinese companies are more confident in reaching agreements with overseas companies to use RMB settlement.

Although the proportion of RMB payments has increased for seven consecutive months, setting a new record, the share of 3.47% is still relatively low and does not match my country's economic status in the world.#美联储是否加息？ #带你看看币安Launchpad $BTC