SWIFT’s RMB Tracker shows that the yuan is now the second most used currency for cross-border payments by regions when doing business with the mainland and Hong Kong. In May, 12 percent of cross-border payments with the mainland and Hong Kong were done using yuan, up 36 percent from a year earlier. The US dollar remains in the top position, with the Hong Kong dollar following close behind the yuan for payments to the mainland and Hong Kong.
“Hong Kong has the most-established and largest renminbi corridor with mainland China, but as other financial centres, such as London, Singapore and Frankfurt establish the necessary infrastructure and agreements to support RMB transactions, we will see the RMB grow significantly in these markets,” Alain Raes, SWIFT chief executive for Asia Pacific & EMEA, said.
The latest SWIFT RMB Tracker comes on the heels of two key announcements related to yuan clearing in Europe. On June 19, China Construction Bank (London branch) was named the clearing bank for offshore yuan in London. On the same day, Bank of China (Frankfurt branch) became the first institution in the euro zone allowed to clear payments in the currency. Bank of China is also the clearing bank for yuan in Hong Kong, Macau and Taipei, while the mandate in Singapore belongs to Industrial & Commercial Bank of China Ltd.
“Creating these hubs in Frankfurt and London to support RMB trading will promote greater use of the currency for global trade and finance across the region. As the use of the RMB grows, we expect more market centres to take notice of the RMB as a world payments currency,” Raes said.
Overall, the yuan held its position as the seventh most used global payments currency and accounted for 1.47 percent of global payments, up from 1.43 percent in April. At a global level, all currencies decreased in value by 0.7 percent in the same month.
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