According to Bloomberg News, since the ongoing war between Russia and Ukraine, together with inflation has weighed less on its appeal for carrying out transactions, the euro is being less often used these days as a global payment currency, registering the biggest percentage decline in more than ten years in March.
In the meantime, the US dollar continued to remain in the top slot for ten months at a stretch and has been dominating the payments globally for the major part since 2013, as per data obtained from the Society for Worldwide Interbank Financial Telecommunications, or SWIFT.
Payments that involved the euro declined to 35.4% of the market share, the lowest in proportion since the earlier months of the pandemic, as per SWIFT. The worldwide financial messaging company caters to more than 11,000 financial institutions across 200 nations. Last month, SWIFT was in the news when the sanctions prevented Russian banks from using the platform.
Global inflation’s correlation with geopolitical uncertainty
Global inflation coupled with uncertainty in the geopolitical scenario has driven businesses’ transactions to safer havens like the greenback. The dollar was the most used currency for making payments globally last month, escalating to 41.1% of the SWIFT transactions, which has been recorded as the most significant proportion since April 2020.
The Japanese currency, which dropped to a 20-year low against the dollar in the present month, the yen was found to gaining some ground when usage was concerned in March, escalating to 2.8% of payments, which is recorded as the most since October. The share of the Australian dollar was found to drop a little.
According to Bloomberg News, the share of the Chinese yuan for transactions dropped to the lowest since November, as the country’s economy continues to be under the reel of Covid lockdowns. Unemployment data and weak consumer spending further increased worries related to the economy on Monday.
