The Chinese national currency -Yuan, has overtaken the Euro in October, becoming the second-most used currency in trade finance, global transaction services organization- SWIFT, said yesterday.

The market share of yuan usage in trade finance, or Letters of Credit and Collection, grew to 8.66 per cent in October 2013. That improved from 1.89 per cent in January 2012.

The yuan, also known as the renminbi (RMB), now ranks behind the U.S. dollar, which remains the leading currency with a share of 81.08 per cent.

Analyst said this was a good development for China, world’s second-largest economy which is accelerating the pace of financial reform to promote its currency to international players beyond Hong Kong.

According to statement by SWIFT, the top five countries using the yuan for trade finance in October were China, Hong Kong, Singapore, Germany and Australia.

“The RMB is clearly a top currency for trade finance globally and even more so in Asia,” Franck de Praetere, SWIFT’s Asia Pacific head of payments and trade markets said.

The RMB remained the 12th payments currency of the world, with a slightly decreased share of 0.84 percent compared with 0.86 per cent in September.

RMB payments increased in value by 1.5 percent in October, while growth for all payments currencies was at 4.6 per cent.

Yuan trade settlement has expanded quickly since it first began in 2009 and the percentage of China’s total trade settled in yuan has risen from 12 percent in 2012 to nearly 20 per cent.