RMB "First Time"! Global currency payments have undergone a major adjustment, with the US dollar dropping to 46.58% and the euro

Recently, the World Bank Financial Telecommunication Association (Swift) released a global ranking of payment currencies based on amount statistics.
In September 2023, the US dollar, euro, pound sterling, and yen respectively ranked in the top four with a proportion of 46.58%, 23.60%, 7.32%, and 4.2%.
This data reflects the phenomenon of a decline in the US dollar, a decline in the euro, an increase in the pound, and an increase in the yen and renminbi.
Among them, the proportion of RMB has reached a new high in recent years.
The position of the US dollar is stable, while the euro continues to be 'second'
In September 2023, the US dollar remained the world's largest active currency, with a payment share of 46.58%, a decrease of 1.45 percentage points month on month. Although its performance was not as strong as before, it almost accounted for half of the global currency payment market.
In addition, the Federal Reserve has been continuously raising interest rates this year, attracting global capital inflows, and the US dollar's position has become even stronger.
In addition, the vast majority of commodities are priced in US dollars, and US dollar transactions are very frequent globally, providing strong endorsement for US dollar credit and also being the dominant support for the US dollar in the payment market.
There is no hope that the euro will surpass the US dollar, and it still cannot get rid of its "second" position, with a significant proportion. The trade transactions between 19 countries in the eurozone have also been included in the statistics by SWIFT, which is suspected of "brushing data".

The third ranked country is the British pound, with a payment proportion of 7.32%, slightly increasing compared to last month. The international payment proportion of the Japanese yen ranks fourth, reaching 4.2%, also achieving a slight increase.

Why did the euro suddenly fall
There are many reasons behind the sharp decline of the euro, mainly from the impact of the Russia-Ukraine conflict.
The energy supply in Europe is no longer limited to Russia, but can only be purchased from other countries. The payment ratio of the euro has greatly decreased, and instead it has become the full complement of the US dollar.
In addition, since the beginning of this year, the European economy has generally been poor, especially Germany, which is the locomotive of the European economy, has experienced two consecutive quarters of GDP decline, with the manufacturing PMI falling below 40%.
The sluggish manufacturing industry and sluggish exports have also had a negative impact on trade throughout Europe.
In addition, due to the rise of the renminbi, it has also to some extent seized some market share of the euro.
So, under the combined influence of multiple factors, the proportion of payments in the euro has continued to decline. Currently, it has lost its strength to compete with the US dollar, and almost all of the lost payments in the euro have been "monopolized" by the US dollar.
The RMB has been on a downward trend for 9 consecutive months
According to data released by Swift, the international payment proportion of the Chinese yuan is 3.71%, ranking fifth in the world and achieving growth compared to August.
It is worth noting that, while the payment amount in all currencies decreased by nearly 4% in the current month, the payment amount in RMB increased by 2.7%.
The proportion of RMB global payments from January to September this year was 1.91%, 2.19%, 2.26%, 2.29%, 2.54%, 2.77%, 3.06%, 3.47%, and 3.71%, respectively. The proportion of RMB global payments has maintained growth for nine consecutive months.
On the one hand, as the world's largest trading country for goods, China's economy has stabilized and improved since the beginning of this year, with its foreign trade export data increasing quarter by quarter. In August and September, imports and exports continued to grow positively for two consecutive months on a month on month basis, strongly supporting the increase in the share of RMB payments.
On the other hand, the RMB Cross border Settlement System (CIPS) is becoming increasingly sophisticated and convenient.
Local banks in emerging market countries have chosen to access CIPS for RMB settlement services, gradually increasing the number of participants, business volume, and influence.
It should be pointed out that there is still a portion of trade settlements and financial transactions that have not been recorded through the system.
Especially for direct participants in the CIPS system, they can bypass the SWIFT channel and establish a full process closed-loop operation from customer transactions, bank clearing, to settlement and bookkeeping. The data in the SWIFT system is more for reference only.
So, the renminbi is still undervalued, far more than the 3.71% reported by SWIFT.
The SWIFT system is an international settlement system operating under the US dollar hegemony system, and the scale of Sino Russian trade alone cannot be included in it.
According to data released by customs, the trade volume between China and Russia reached 176.4 billion US dollars from January to September this year, an increase of nearly 30% year-on-year.
This has exceeded the trade volume between China and Russia (158 billion US dollars), and the scale of Sino Russian trade is still accelerating.
In addition, China has achieved energy trade settled in RMB with some oil producing countries in the Middle East, as well as trade cooperation with South American countries such as Brazil and Argentina. Therefore, the true international payment ratio of RMB is much greater than 3.71%.
Overall, the internationalization of the RMB still has a long way to go. Although the world is "de dollarizing," no one can replace the strong position of the US dollar in the short term.