China’s volume of international transactions that cleared in its own yuan currency tumbled on fading confidence in its financial stability by 12.31 percent in October 2019.
The Society for Worldwide Interbank Financial Telecommunication (SWIFT) reported that despite the volume of international payments was up by a brisk 4.17 percent in October over September, the volume of cross-border transactions conducted in China’s yuan currency was down 12.31 percent. SWIFT tracks global interbank transactions for more than 11,000 financial institutions in over 200 countries.
October was expected to be an extraordinarily strong month for yuan transactions following the launch of a global financial markets “connect” trading programs with the Hong Kong Exchange; Morgan Stanley Capital adding China domestic securities to its stock market indexes; and the People’s Bank of China cutting its one-year Loan Prime Rate of interest to stimulate the domestic economy.
The rise of yuan usage had allowed China to internally finance substantially more trade payments without being forced to post collateral with Eurodollar banks to guarantee the exchange of yuan into U.S. dollars for complete customer payments. Wall Street credited the rise of yuan transaction volumes as a tangible sign of China’s financial stability….CLICK for complete article