Renminbi (RMB) usage accounted for just 1.61 percent of domestic and cross-border payments in December 2017, according to Swift’s RMB tracker.
Swift found that despite the growing importance of China in the global economy and the various strategic measures put in place to support its currency, Hong Kong remains the largest RMB clearing centre with 76 percent activity share.
However, its share of global RMB clearing activity decreased from 6.51 percent in 2016 to 5.59 percent in 2017.
Swift found that Hong Kong’s currency is showing signs of growth as it gains pace on digital platforms.
The report showed that London remains the largest clearing centre outside of Greater China, while Chinese Yuan (CNY) and the US dollar (USD) remains the most important currency pair in value.
The prominent role of the CNY/USD pair remained unchanged. More than 97 percent of RMB trading by value is against the USD and there is no substantial liquidity in any other RMB pair.
According to the report, some of the major trends impacting internationalisation in 2018, will include the emergence of a cashless society, expanded trade links between Asia, Africa and Europe through China’s belt and road initiative and continued globalisation of Chinese banks and their adoption of the Swift global payments innovation (gpi) service.
Michael Moon, head of payments Markets, Asia Pacific at SWIFT, said: “The RMB has had a difficult year in 2017 and struggled to realise its potential for growth. Experts suggest that capital controls and uncertainties over future regulations mean that a significant reversal of the decline in RMB usage for trade and payments is unlikely in 2018. However, there are promising programmes being put in place that could lead to growth over the longer term.”
“Initiatives, such as Swift gpi strongly support RMB internationalisation as it is rapidly picking up pace in China. As of today, 22 Chinese banks have joined the initiative and China-US is the main corridor for payments on gpi, confirming the rapid pace of adoption. Swift gpi allows for payments to be settled in minutes around the world, ensuring China remains one of the world’s most attractive and economically competitive places to do business.”
