A new RMB Tracker created by SWIFT has found that, over the past year, Renmimbi payments in four European countries have gradually outstripped even China and Hong Kong.
The UK saw growth of 123.6% in RMB payments between July 2013 and July 2014, whilst Germany say 116%, France 43.5% and Luxembourg 41.9%. Overall, European RMB payments directly exchanged with China and Hong Kong increased 105%. The RMB is now the seventh most widely used currency in the world, accounting for 1.57% of payments globally.
“For most of these European hubs, Greater China still remains the main trading partner in RMB”, commented Michael Moon, SWIFT’s Head of Payments and RMB for Asia Pacific. “However, there seems to be a noticeable shift in business for some countries like Luxembourg, with an increasing share of truly offshore flows (e.g. no Greater China leg). In the future, we should see a bigger contribution from truly offshore flows in the internationalisation of the Chinese currency”.
He added: “Over the past year, Chinese authorities and financial institutions announced new partnerships with European countries, making them official clearing centres for the RMB. These announcements have boosted the RMB trading activities in these countries. After the United Kingdom and Germany, we may see similar trends happening in France, Luxembourg and even Switzerland. Announced in July, the bilateral currency swap agreement between the People’s Bank of China and the Swiss National Bank could put Switzerland in line to become a new RMB hub in Europe.”
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