Renminbi (Rmb) usage decline in the first half of the year as it was overtaken by the Japanese yen as the most used currency in Asia Pacific for payments with China and Hong Kong.
Furthermore, the Canadian dollar overtook the Rmb for payments globally in June, pushing the Chinese currency down to the sixth most used for payments in the world.
Swift’s data shows that the Rmb now has a 1.72% share of the global market, marking a gradual slowdown that has taken place over the course of 2016. Despite this, there has been a 12% uptick in the number of financial institutions now settling in Rmb – with more than 1,800 doing so in June.
The UK represents the number one clearing centre for Rmb transactions outside of China, including Hong Kong. London processes 24.4% of international payments.
While the general slowdown is expected to continue for the rest of the year, analysts forecast more and more banks to start settling in Rmb as 2016 goes on.
“The appetite for using the Rmb to make international payments among financial institutions remains firmly on the rise, reflecting the increasing acceptance of the Rmb as a true global currency,” says Kee Joo Wong, regional head of global liquidity and cash management at HSBC.
Swift’s Alain Raes, the CEO for Asia Pacific and Emea, adds: “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.”