UK overtakes Singapore as renminbi clearing centre

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The United Kingdom’s renminbi (RMB) payments value increased by 21% between March 2014 and March 2016, positioning the UK as the first offshore RMB clearing centre after Hong Kong, according to SWIFT.

The financial messaging services provider reports that Singapore overtook the UK in February 2014, but its latest RMB Tracker shows the trend started to reverse as of January 2016. Hong Kong remains the world’s largest offshore RMB centre, processing 72.5% of all RMB payments, followed by the UK with a share of 6.3% and Singapore with 4.6%.

SWIFT data also shows that 40% of all payments made between the UK and China/Hong Kong are exchanged in RMB. The Chinese currency is by far the most used in this corridor, followed by the Hong Kong dollar (HKD) at 24% and the British pound (GBP) at 12%.

“Since the China Construction Bank’s [CCB] London branch became a clearing bank in the UK in June 2014, there has been a steady growth of RMB payments between the UK and China/Hong Kong,” said Stephen Gilderdale, managing director, UK, Ireland & Nordics at SWIFT.

“Offshore RMB clearing centres are driving greater use of the currency in global trade, and countries such as the United Kingdom, are reaping the benefits.”

In March 2016, the RMB remained stable in its position as the fifth most active currency for global payments by value with a share of 1.88%, a slight increase from 1.74% in February 2016. Overall, RMB payments value increased by 18.46% compared to February 2016, while in general all payments currencies increased by 10.67%.

“The UK’s rise to become the largest offshore RMB hub outside Hong Kong reflects the importance that European companies are placing on their commercial relationships in China,” said Eddie Norton, HSBC’s regional head of payments and cash management, Europe.

“The opening of a clearing centre two years ago has helped the UK to build up RMB liquidity, and progressive businesses are capitalising on London’s enhanced payments infrastructure to connect with partners overseas. As other regional cities such as Frankfurt and Paris strive to increase their RMB business, the outlook for European trade and investment flows with China looks increasingly bright.”

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