European hubs are fuelling RMB Internationalisation
Brussels, 26 August 2014 – SWIFT’s latest RMB Tracker shows that Europe represents 10% of Renminbi payments worldwide in value. For the past year, four European countries have been settling into the top 10, excluding China and Hong Kong. The United Kingdom leads Europe with 123.6% growth between July 2013 and July 2014, followed by France (+43.5%), Germany (+116%) and Luxembourg (+41.9%). Since July 2013, European payments directly exchanged with China and Hong Kong in RMB have increased by 105%, showing a considerable upwards trend in RMB usage.
“For most of these European hubs, Greater China still remains the main trading partner in RMB”, says Michael Moon, Head of Payments and RMB, Asia Pacific at SWIFT. “However, there seems to be a noticeable shift in business for some countries like Luxembourg, with an increasing share of truly offshore flows (e.g. no Greater China leg). In the future, we should see a bigger contribution from truly offshore flows in the internationalisation of the Chinese currency”.
Moon adds, “Over the past year, Chinese authorities and financial institutions announced new partnerships with European countries, making them official clearing centres for the RMB. These announcements have boosted the RMB trading activities in these countries. After the United Kingdom and Germany, we may see similar trends happening in France, Luxembourg and even Switzerland. Announced in July, the bilateral currency swap agreement between the People’s Bank of China and the Swiss National Bank could put Switzerland in line to become a new RMB hub in Europe”.
Overall, the RMB strengthened its position as the seventh most used global payments currency and accounted for 1.57% of global payments. In July 2014, RMB payments grew in value by 3.0% compared to June 2014. At a global level, all currencies increased in value by only 2.0% in the same month.
SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 10,500 banking organisations, securities institutions and corporate customers in 215 countries and territories. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.
About SWIFT RMB Tracker & RMB Internationalisation
Launched in September 2011, the SWIFT RMB Tracker provides monthly reporting on key statistics to understand the progress made by RMB towards becoming an international currency. To register for the RMB Tracker in English, Traditional or Simplified Chinese, visit swift.com (select ‘Banks on SWIFT’) or e-mail firstname.lastname@example.org.
The free SWIFT RMB Tracker provides a monthly report on key statistics available only from SWIFT, which helps you track and understand how the RMB is being used across geographies and financial sectors. It is based on facts and should not be seen as providing any recommendation or opinion on the evolution of the market.