For the third consecutive month, the Renminbi (RMB) is one of the top ten most-used currencies for payments worldwide. With an activity share of 1.39% in payments value, the RMB now ranks 7th, closely followed by the Swiss Franc at 1.38%.

In January 2014, RMB payments increased by 30.6% while the growth for all payments currencies was at 4.8%. RMB payments are still heavily concentrated in the Hong Kong market with an activity share of 73%. The eight next most active offshore RMB centres (United Kingdom, Singapore, Taiwan, United States, France, Australia, Luxembourg and Germany) together represent 85% of total RMB payments by value (excluding Hong Kong and China).

In January 2014, excluding Hong Kong and China, the RMB offshore weight of the U.S. increased to 7.3 %, up from 4.1% in January 2013. Taiwan experienced a similar jump in weight to 9.0% up from 3.6% during the same period in 2013.

Michael Moon, Director, Payments Markets, Asia Pacific at SWIFT, says: “Looking at the first month of 2014, which was the highest payments value recorded for RMB so far, it is clear that the RMB is on its way to remaining a top ten currency for global payments. Hong Kong continues its role as the leading RMB hub, and we see that the overall expansion of this market allows for strong growth in offshore centres, such as the U.S. and Taiwan. These new offshore markets play a significant role in maintaining the RMB’s position as a ‘business as usual’ world payments currency.”

What Moon didn’t mention was that the RMB value v. the USD fell 0.6% in early 2014, but this clearly has not affected the expansion of RMB usage.

On-the-ground expertise and experience required

To fully exploit the RMB opportunity is not easy. To fully understand the pilot programmes that the People’s Bank of China (PBOC) have used to ‘free up’ the RMB has been difficult, often local knowledge is required. Either local experienced local nationals or a bank with detailed local knowledge and understanding is essential. Not surprisingly this is driving up the salaries of experienced treasury staff in the China/Hong Kong region.