More financial institutions are using Chinese currency for payments, says SWIFT study
Payments worldwide using the Chinese currency, the renminbi, nearly tripled in value in the two years ending in August, Belgium-based global payment services company SWIFT said in a statement on Sept 25.
The renminbi is now supported by a much broader base, with 35 percent more financial institutions using the renminbi for payments with the Chinese mainland and Hong Kong, SWIFT’s latest renminbi Tracker showed.
Currently, more than one-third of financial institutions around the world use the renminbi for payments to the Chinese mainland and Hong Kong.
Asia leads the way at nearly 40-percent adoption, with an increase of 22 percent since 2012. The Americas follow at 32-percent adoption with an increase of 44 percent, SWIFT said.
Europe falls closely behind the Americas at 31-percent adoption with an increase of 47 percent, and the Middle East and Africa are at 26-percent adoption, with an increase of 83 percent during the same two-year period.
Renminbi usage by financial institutions and corporations is steadily growing, said Stephen Gilderdale, head of new business development at SWIFT. More financial institutions using the renminbi will improve the utility of the currency in Hong Kong, the Chinese mainland and other offshore centers, he said.
As the currency continues to grow, opportunities will arise leading to the development of new products and services denominated in renminbi. These new products and services will help drive greater use of the currency globally while making it a more efficient one to manage, Gilderdale said.
Overall, the renminbi strengthened its position as the seventh-ranked global payments currency and accounted for 1.64 percent of global payments last month, an increase from 1.57 percent in July 2014.
In August 2014, the value of renminbi global payments decreased by 6 percent, while all currencies dropped by 10 percent. The trend is most likely attributable to lower seasonal payments activity, according to SWIFT.
The SWIFT renminbi Tracker, launched in September 2011, provides monthly reporting on key statistics to understand the progress made by the renminbi toward becoming an international currency.