Global use of the renminbi is on the wane just one year after the International Monetary Fund formally recognised it as an “international reserve currency”, in a setback for Beijing’s ambition to promote its currency as a rival to the US dollar.
According to central bank data, the amount of China’s foreign trade settled in renminbi surged from zero in 2010 to 26 per cent in 2015, but has since fallen to 16 per cent. Cross-border renminbi payments over the first nine months of this year fell 16 per cent compared with the same period last year, reflecting the fall in renminbi usage for trade and cross-border investment.
The renminbi’s rising popularity on foreign exchange markets has also proved fleeting. In 2013 it was the ninth most-traded currency, up seven places from 2010, according to the Bank for International Settlements. It has barely budged since, ranking eighth this year.