The Chinese renminbi (RMB) continued to make ground as a global currency in June, but with a 1.72% share of world payments it was overtaken by the Canadian dollar (CND), which had a 1.96% share, reports SWIFT.
“The data marks a gradual, but expected, slowdown for the currency as it continues on its path to internationalisation,” commented the financial messaging services provider in its latest RMB Tracker, in a special edition to mark SWIFT’s Greater China regional conference being held in Shanghai.
“In spite of this trend, and as of June 2016, more than 1,800 financial institutions worldwide are using the RMB for payments (with or without China and Hong Kong) representing a 12% increase compared to the same month last year.”
SWIFT’s data also shows that in the first half of 2016 the Japanese yen (JPY) edged past the RMB to become the most active currency within the Asia Pacific (Apac) region for payments with China and Hong Kong, with a 32.8% share against 31.2% for RMB.
New offshore centres have emerged, including Seoul and Canada, and the United Kingdom has regained its status as the number one clearing centre after Hong Kong, processing 24.4% of RMB payments, excluding China and Hong Kong.
Alain Raes, chief executive officer (CEO), Apac and Europe, the Middle East and Africa (EMEA) at SWIFT commented: “As RMB growth is linked to China’s economic activity, data suggests that the volatility in the Chinese market and the slowdown of the Chinese economy are likely factors that have impacted offshore RMB usage this past year.
“On a positive note, key initiatives, such as the progress of China’s new cross-border inter-bank payments system (CIPS) and the opening of new offshore clearing centres, sets a solid foundation for future growth. These initiatives, when combined with industry efforts to expand the RMB’s reach, enhance products and services and focus more on standards and compliance, sets the RMB on a clear path towards internationalisation.”
“The appetite for using the RMB to make international payments among financial institutions remains firmly on the rise, reflecting the increasing acceptance of the RMB as a true global currency,” said Kee Joo Wong, Asia Pacific regional head of liquidity and cash management at HSBC.
“We expect this trend of global participation to continue as China further builds out the clearing infrastructure to support the use of the RMB and continues to implement liberalisation measures that will serve to strengthen the currency’s appeal to corporate users in future.”
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