Chinese Yuan Stuck for Three Years While U.S. Dollar Pulls Ahead

New Delhi, India: The U.S. dollar has remained the dominant currency in global transactions despite a decline in its value last year, while the Chinese yuan has remained stagnant for the past three years.

In international trade, the U.S. dollar accounts for roughly half of all transactions, reinforcing its strong global position. According to SWIFT data, the dollar’s share in international payments has risen to 50.5%, the highest since 2023, marking an 11.6% increase over the past four years. This means that nearly one in every two global transactions is conducted in dollars.

Global Currency Rankings in Transactions:

• Euro (EUR): 21.9%
• British Pound (GBP): 6.7%
• Canadian Dollar (CAD) & Japanese Yen (JPY): 3.4% each
• Chinese Yuan (CNY): 2.7%

Despite China’s trade surplus exceeding $1 trillion last year, the yuan has not gained traction in global transactions, remaining at the same level for the past three years.

Dollar vs. Gold and Global Reserves:
While the dollar dominates global transactions, its share in foreign exchange reserves has recently fallen to 40%, the lowest in 20 years, down 18% over the last decade. Conversely, gold’s share in global reserves has risen to 28%, the highest since the early 1990s.

This shift is partly due to geopolitical tensions, including the freeze of Russian overseas assets after the Ukraine conflict, prompting countries to diversify reserves and increase gold holdings. Today, gold’s share in global reserves exceeds the combined share of the euro, yen, and pound.

Conclusion:
While the U.S. dollar continues to strengthen in international trade, the Chinese yuan struggles to make inroads, highlighting the slow pace of global adoption despite China’s economic might.