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RMB back to #5 globally & UAE shows stellar growth in RMB adoption

Data from SWIFT’s latest RMB Tracker shows that the RMB has regained 5th spot global and that there was exceptional growth in RMB adoption in the United Arab Emirates (UAE) - a 210.8% growth in payments value of the currency since August 2014, albeit from a low base. More than 80% of the direct payments made between the UAE and China/Hong Kong in August 2016 were in CNY, representing one of the highest increases worldwide.

A special edition of the RMB Tracker provides four snapshots of other markets in EMEA, France, Germany, Switzerland and the UAE. The analysis showed that:

  • the EMEA region is ranked as number two in RMB adoption after Asia-Pacific
  • the RMB has retained its position as the number five world payments currency, representing 1.86% of global payments by value
  • France leads Eurozone countries in RMB payments by value, despite flat growth over the past three years. Close to 50% of France’s direct payments with China/Hong Kong were denominated in CNY in August 2016
  • RMB is ranked number three in Switzerland for direct payments with China/Hong Kong after HKD and CHF. There has been 43.5% growth in RMB payments by value compared to November 2015, when the clearing centre was established
  • euro continues to dominate the corridor for payments between Germany and China/Hong Kong with a share of 80.1%
  • UK remains the dominant offshore RMB clearing centre after Hong Kong, totalling 67.3% of all RMB direct payments made between Europe and China/Hong Kong in August 2016.

The special edition also gave details of the rollout of RMB clearing banks, as shown below:

Source & Copyright©2016 - SWIFT 

RMB usage in USA and Europe

SWIFT’s August 2016 data shows that only 2.8% of all payments by value between US and China/Hong Kong are done in RMB while Europe, for example, reached 30.6%. The appointment of the new clearing centre, on 21 September 2016 - the People’s Bank of China appointed Bank of China as the first yuan clearing bank in the United States, will probably the usage of RMB in the US.

Enhancing the internationalisation of the RMB

The pace has slowed in some markets in the past few months. To enhance the internationalisation of the RMB, the special edition notes that the following key factors are critical:

  • expanding the connectedness of the RMB 
  • enhancing RMB produces and services 
  • have an ongoing focus on standards compliance to local and global regulations is ever more important. 
  • The special edition also reports on the seven step approach that the Chinese authorities have applied.

CTMfile take: The growth in the usage of RMB is slowing, as is global trade. It will take many years before the RMB becomes a real, practical reserve currency.

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This item appears in the following sections:
FX Management & Crypto
Buying & Selling FX
FX Settlement
Cash & Liq. Mngm in Middle East & Africa

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