China currency edging towards fuller internationalisation

Data from SWIFT’s RMB Tracker show that despite continued growth globally, the Canadian dollar has overtaken the RMB with a 1.96 percent share of world payments currencies, leaving the Chinese currency at position number six with a 1.72 percent share in June.

The report focuses on 2016 half-year statistics and analysis from SWIFT, as well as insights from financial industry experts on the recent evolutions of the RMB and what the future has in store for the Chinese currency.

Data within the report show that in the first half of 2016, the Japanese Yen edged past the RMB to become the most active currency within APAC for payments with China and Hong Kong, with a 32.8 percent share (RMB at 31.2 percent). New offshore centres have emerged including Seoul and Canada, and the United Kingdom has regained its status as the number one clearing centre after Hong Kong, processing 24.4 percent of RMB payments, excluding China and Hong Kong.

Alain Raes, chief executive, Asia Pacific & EMEA at SWIFT said: “As RMB growth is linked to China’s economic activity, data suggests that the volatility in the Chinese market and the slowdown of the Chinese economy are likely factors that have impacted offshore RMB usage this past year. On a positive note, key initiatives, such as the progress of China’s new Cross border Inter-Bank Payments System (CIPS) and the opening of new offshore clearing centres, sets a solid foundation for future growth. These initiatives, when combined with industry efforts to expand the RMB’s reach, enhance products and services and focus more on standards and compliance, sets the RMB on a clear path towards internationalisation.”