The use of dollars in global payments is at a record high
Transactions in the US currency rose 46% last July
The dollar's role in international payments increased last month, reaching an all-time high, according to the latest data from the global money transfer system, SWIFT.
The figures show that dollar-related trading rose to a record 46% in July, compared to just over a third a decade ago. The dollar was the first currency as measured by the number of transactions, followed by the euro, the pound sterling, the yen and the yuan.
Major international banks use the "Association for International Interbank Financial Telecommunications" system known as "SWIFT" to communicate with each other and facilitate currency transactions between banks. The information that SWIFT breaks down, such as about 200 million confirmations of forex trades annually; It has provided a window into global flows since the system began compiling them in 2010. The latest figures reflect a technical upgrade that builds on changes this year to how trades are monitored.
While SWIFT data does not cover the entire currency market; But it reinforces the notion that the dollar's role in international finance remains strong, even with some efforts toward greater diversification. For example; The multilateral bank set up by the BRICS group of emerging market countries aims to raise the share of financing in local currencies to 30% from less than 20%.
The increased dollar earnings from SWIFT transactions came largely at the expense of the euro, whose share in international transactions reached a 2012 high of 46%. Last month, the European currency's share of trades was at an all-time low, at just under a quarter.
The SWIFT data also reveals the increasing frequency of yuan-related transactions, as the Chinese currency has gradually become more integrated into global foreign exchange flows. In July, for only the second time ever; More than 3% of SWIFT transactions concerned the yuan, while in 2010 this figure was around 0.03%.
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