RMB a “top five” currency, says SWIFT 26 February 2015Brussels Reporter: Stephen Durham
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January’s SWIFT RMB Tracker covered the Renminbi (RMB) breaking into the top five world currencies used in global payments.
The focus in February is on the use of RMB as currency for documentary credit transactions. Recent SWIFT data has shown that the RMB’s activity share for documentary credits increased in value from 7.32 percent in January 2013 to 9.43 percent in January 2015.
This strengthens the RMB’s position as the second most used currency for this purpose, ranking behind the US dollar, which remains the leading currency for documentary credits with a share of nearly 80 percent.
In January 2015, China, Singapore and Hong Kong remained the top three countries using RMB as currency for documentary credits, exchanging nearly 95 percent of all RMB documentary credit transactions worldwide in value.
They were followed by Macau and Taiwan with 0.88 percent and 0.86 percent, respectively.
“Letters of credit and documentary collections are widely used instruments to finance trade flows across Asia,” said André Casterman, global head of corporate and supply chain markets at SWIFT.
“China’s position as one of the main exporting and importing countries in the world is supporting the increasing use of the Chinese currency. However, many of these RMB transactions are still mostly driven by China and Hong Kong, even though the RMB is nearly 10 percent of traditional trade finance flows globally in terms of value.”
In January 2015, the RMB held its position as the fifth most used payments currency in the world with an activity share of 2.06 percent.
Overall, RMB payments decreased in value by 10.22 percent in January 2015, whilst the decrease for all payments currencies was at 5.7 percent, according to SWIFT.
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