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China's yuan has reached a significant milestone, as its share in global payments soared to an all-time high in July. This development is encouraging for China as it works towards expanding the international presence of the Chinese currency and weakening the dominance of the US dollar.
According to data from Society for Worldwide Interbank Financial Telecommunication Swift, the world's largest interbank messaging service, the yuan mntned its fourth position among global payment currencies last month, with its share in transactions rising by 0.13 to reach a new high of 4.74, compared to June's figure of 4.61.
These gns are a testament to China's ongoing efforts to boost the yuan's use and influence beyond national borders. Swift data serves as an indicator of global currency usage in international trade transactions.
The US Federal Reserve initiated its rate-cutting cycle on Wednesday, trimming benchmark interest rates by half a percentage point to a range between 4.75 and 5. This marks a reversal from the series of eleven increases that began in March 2022 and exted until July last year.
Analysts are expecting this shift in monetary policy by the US Federal Reserve to provide China, along with other Asian economies, more flexibility for easing policies med at stimulating growth.
Sarah Tan, an economist from Moody's Analytics, highlights that such rate cuts could give China's central bank, the People's Bank of China PBOC, additional room to adjust its monetary policy stance in order to address domestic demand weakness.
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In summary, July witnessed a noteworthy boost in global payments involving China's yuan, marking a critical development that reflects ongoing efforts towards strengthening its international role. This improvement also opens up possibilities for China to implement more accommodative monetary policies and stimulate economic growth domestically.
This article is reproduced from: https://www.scmp.com/economy/china-economy/article/3275668/chinas-yuan-hits-internationalisation-landmark-record-share-global-payments
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China Yuan Global Payments Increase US Dollar Dominance Weakened Swift Data Supports Yuan Rise International Presence of Chinese Currency Asian Economies Policy Flexibility Gain PBOC Space for Easier Policies