Australia’s renminbi payments value increased by 248% between February 2013 and February 2014, placing Australia at number 6 in the world for renminbi payments value (excluding China and Hong Kong). In February 2014, 14.2% of payments between Australia and China/Hong Kong were in renminbi versus 7.7% the previous year and only 1.9% in February 2012,  SWIFT’s RMB Tracker shows.

Bill Doran, head of Oceania for SWIFT, says: “98% of these payments in value are institutional, as opposed to payments sent by banks on behalf of their customers, which makes up the remaining 2%. This is most likely a reflection of the renminbi mainly being used for investments and foreign exchange activities, rather than trade settlement. Given the strong trade relationship between China and Australia, we expect to see direct customer payments in this country grow as well. There are real benefits for Australian companies to use the renminbi. Some of these benefits include faster settlement of payment between suppliers and buyers, savings on invoicing costs, reduction of exchange rate risk and reach to more Chinese customers and investors who prefer to trade in their currency.”

Doran adds: “With the recent announcement of ASX and Bank of China to establish a renminbi settlement service in July 2014, Australian companies trading with China will be able to pay and receive in renminbi for cross-border transactions just as they do with the Australian dollar. As a result, we expect to see further growth of renminbi usage in Australia.” SWIFT provides the messaging interface for ASX’s Austraclear participants as well as the transactional link with the Bank of China.

Overall RMB progress

In February 2014, the Chinese currency fell back behind the Swiss franc by 0.03 percentage points, despite a record-high activity share for the renminbi globally of 1.42% (from 1.39% in February 2013), moving to position  number 8 as a global payment currency.  This is likely due to the seasonal effect of the Chinese New Year. The AUD ranks fifth globally, with an activity share of 1.83%. At global level, renminbi payments decreased in value by 8.5% in February 2014 compared to January 2014, although all currencies decreased by 10.7% during that same period. The overall negative trend may be due to February being a shorter month.

In Australia

Tony Cripps, chief executive officer, HSBC Bank Australia, said following the SWIFT report: "While China is Australia’s most important trade partner, receiving nearly a third of our goods exports; we’ve historically been underweight in our use of renminbi. The latest SWIFT RMB Tracker, however, shows this is changing. Australia has taken a number of steps to support internationalisation of the renminbi, including the Reserve Bank of Australia's (RBA)  bilateral swap agreement, official dialogue on renminbi trade and investment and renminbi:AUD direct convertibility. As a result, Australian companies are increasingly attuned to renminbi developments as part of their global trade and liquidity strategies and they’re capitalizing on the opportunities the currency provides. Australia’s increasing use of the renminbi is indicative of the continued maturing of this important currency. We expect the renminbi to be one of the top three global trade currencies by 2015 and we forecast that it will be fully convertible within two to three years.