The value of global Renminbi (Rmb) payments increased by almost 5% between July and August – but this significantly trails the rise in payments value across all currencies.

Payments across all currencies increased by 7.21% over the period, compared to 4.81% for Rmb payments, as the volatility and slowdown in China’s economy affects the currency’s usage overseas.

The Rmb remains the fifth most-used world payment currency, ahead of the Canadian dollar, but it accounts for just 1.86% of global trade settlements. Having grown significantly in the run-up to 2015, it seems to have plateaued over the past year and shows no signs of overtaking the Japanese yen, which is in fourth place on 3.37%.

Almost one year ago, the IMF included the Rmb in its Special Drawing Rights (SDR) basket, along with four other major currencies, which sparked hopes that the pace of internationalisation and the uptake in Rmb payments would escalate.

In addition to this, a memorandum signed between Swift and China’s new Cross Border Inter-Bank Payments System (CIPS – described by some as the “Chinese Swift”) in March was expected to speed things along. Progress has been slower than expected.

In a special report released for Sibos, Swift’s CEO for Apac and Emea Alain Raes says said that the memorandum should help improve customer’s experience of using Rmb and make it more efficient, since it will help integrate CIPS with the Swift messaging system financiers are so familiar with.

However, anecdotal evidence from the market is that few are using the Rmb as a currency for trade finance outside of Mainland China. Most of the trade is being done by Chinese institutions.

Experts claim that the lack of real connectivity is hindering progress and that the integration of settlement infrastructure is essential if the Rmb is to expand more rapidly.

Vina Cheung, global head of Rmb internationalisation at HSBC, appears optimistic about the currency’s growth prospect, but sounds a warning about the UK’s status as a premier offshore Rmb clearing hub in the post-Brexit era. This view may add to the uncertainty that post-Brexit Britain faces in regard to its Asia trade relations.

She says: “In Europe, the UK is the largest offshore Rmb hub outside Hong Kong, reflecting the importance of China to the UK. How this will develop in light of the UK’s decision to leave the EU is hard to say. While Germany, France and Switzerland are striving to increase their Rmb business, the UK has achieved this status in an environment where there is nothing stopping other countries from doing so.”

One area which has seen significant growth in Rmb payments is the Middle East, and in particular the UAE. While it is coming off an extremely low base, the prospect of a clearing bank being established in the Gulf state by the end of the year has helped Rmb payments grow by almost 50% over the past year, with 80% of payments between the UAE and China or Hong Kong done in Rmb in August 2016.

Khaled Moharem, head of the Middle East and North Africa at Swift, says: “Swift data shows that the UAE is leading in the Middle East in terms of use of the Rmb for exchanging payments with China/Hong Kong. With an Rmb clearer being selected before the end of the year and creating the UAE as an official Rmb clearing centre, it is clear that further strong growth can be expected in this market.”