SWIFT's latest RMB Tracker shows that over the past two years, international RMB payments between ‘true offshore' trading centres (excluding China and Hong Kong) have grown by +837% in value, compared to an overall growth of +378%, reaching a share of 3.25% in September 2014. True offshore international RMB payments are transactions taking place between RMB centres (e.g. Singapore, United Kingdom, Luxembourg, etc.) without involving China and Hong Kong.

Based on the RMB Tracker, clearing centres such as Singapore, United Kingdom and the newly appointed German centre are driving true offshore use of the RMB. Other countries, such as Belgium that are not normally part of the RMB top ten, are also fuelling this offshore trend. Belgium currently sits fourth for true offshore RMB international payments. Over the last nine months, SWIFT has noted a significant increase in all RMB offshore centres with Singapore holding its leading position at +574% growth, followed by Luxembourg (+517%) and the United Kingdom (+236%).

Source & Copyright©2014 - SWIFT 

"Payments, FX and trade finance are the markers to watch for growth in RMB internationalisation," says Alex Medana, Director, Securities Markets, Asia Pacific, SWIFT. "The RMB is primarily used as a trade settlement currency, but it is worth noting that the RMB is steadily making progress as an investment currency.  In the first nine months of 2014, 28% of securities settlement confirmations in RMB were done outside China and Hong Kong, compared to 16% during the same period two years ago."

Use of RMB expands in many different ways

New examples of the use of RMB are announced at least weekly:

• WPG Holdings, a Taiwan-headquartered electronics distributor, has partnered up with Standard Chartered to sweep renminbi through the Shanghai FTZ
• Powerlong uses RMB bond to pay off debts
• according to research firm Aite, “The use of the renminbi in trade finance will increase significantly over the next three to five years. While the currency faces plenty of headwinds, we believe that there is enough support to help it grow, particularly availability and use of RMB-denominated assets. 
• Siemens introduces CNY as a global invoicing currency
• Chinese property developer Powerlong Real Estate Holdings returned to the offshore renminbi bond market with a lucrative deal for investors, raising 1.5 billion renminbi (US$244 million) to refinance maturing debts
• Corporations in Taiwan to Increasingly Utilize RMB for Payments, According to Bank of America Merrill Lynch
• exhong, a Chinese cotton textile manufacturer with operations in Vietnam, Macao, Hong Kong and elsewhere, introduced a cross-border renminbi (RMB) automated sweeping solution so that it could manage its Chinese liquidity and its overseas working capital requirements
• China's currency regulator has granted corporates in China access to certain structured derivative contracts from August.

No wonder The Banker magazine described the RMB progress as the “The unstoppable march of the renminbi.”

Global RMB ranking

Unsurprisingly, the RMB strengthened its position as the seventh-ranked global payments currency and accounted for 1.72% of global payments, an all-time record share. In September 2014, the value of RMB global payments increased by 13.2%, well above the average 8.1% growth for all currencies.

Long term future for RMB

Bankers are starting to wonder how far the RMB could develop. “The US dollar has long occupied pole position in the international currency system, but could China’s renminbi grow to challenge the established hierarchy??” mused Kok-Keong Tay, Head of GTB Asia at UniCredit. Although, Chinese regulation is still a limiting factor.