According to CCTV news on December 23, recently, the transaction data compiled by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) shows that in November 2023, the share of RMB in international payments rose to 4.6% from 3.6% in October, setting a record for RMB. In November, the renminbi's share of global payments surpassed the Japanese yen to become the fourth largest currency for international payments.

In November, the top five global payment currencies based on value were the US dollar, the euro, the British pound, the renminbi and the Japanese yen. In addition, in terms of international payments outside the eurozone, the renminbi ranked fifth in November, accounting for 3.15%.

Compared to October 2023, the total amount paid in RMB increased by 34.87%, while the total amount paid in all currencies increased by 5.35%.

Luo Chi, senior Asia Pacific strategist at BNP Paribas Asset Management, said that there had been a series of positive developments this year in favor of the international use of the renminbi, and that November's data "may even be the beginning of a slow upward trend in the renminbi's share in the SWIFT system."

Economists say much of the recent increase is due to lower interest rates in China. This makes the renminbi more competitive in trade finance. China's benchmark one-year lending market quotes an interest rate of 3.45 per cent, compared with a floor of 5.25 per cent for the US federal funds rate.

The appeal of low rates is also reflected in SWIFT data tracking the yuan's share of trade finance, which rose to 5.7 per cent in November from 5.1 per cent in October. That puts the renminbi in second place, just above the euro. However, both currencies still lag far behind the US dollar, which accounts for more than 80 per cent of the global trade finance market.

With Western central banks keeping interest rates high, the cost of financing trade in yuan has become attractive to some trading partners. This new phenomenon opens the door for China's currency to play a bigger role in trade finance.

At the same time, Western sanctions against countries such as Russia have strengthened the incentive to use the yuan more in global payments. The sanctions have made other economies nervous about the possibility of the dollar being further weaponized.

Bank of Singapore chief economist Mansoor Mohi-Uddin said: "The acceleration of payments in yuan partly reflects the current geopolitical situation. This and longer-term trends in trade flows may be accelerating the use of the Chinese currency."

"On top of that, we're also seeing an increase in the use of renminbi in Asia and other economies that are dependent on Chinese demand," said Carlos Casanova, senior Asia economist at UBS Private Bank.

Since the launch of cross-border RMB trade settlement in 2009, the internationalization of RMB has been going for 14 years. Hu Xiaolian, vice chairman of the China Center for International Economic Exchanges, said earlier at the 14th Caixin Summit that the internationalization of currency needs to establish and adhere to the basic principle of neutrality in the role of international money. The concept of international relations and international economic development and cooperation that China adheres to has laid the value foundation for the internationalization of the RMB.

In recent years, the international use of RMB has made positive progress. From the perspective of cross-border RMB business, from January to September 2023, the cross-border RMB receipt and payment amount of Chinese banks on behalf of customers was 39 trillion yuan, an increase of 23%. From the perspective of RMB investment and financing function, in September 2023, RMB accounted for 5.8% of global trade financing, ranking second; From the perspective of RMB reserve function, more than 80 foreign central banks or monetary authorities have included RMB in their foreign exchange reserves.

China is committed to maintaining economic and financial stability, its economic development has attracted worldwide attention, and China has huge development and market potential. Therefore, when China started the process of internationalization in 2009, RMB became a popular currency in the international community, including developed countries and emerging market countries and regions. The internationalization of the RMB is driven internally by the integration of reform and opening up into the world, and externally by economic cooperation and mutual benefit among countries in the context of globalization. It has formed a sound momentum of development.