The Chinese renminbi dropped to sixth in the international payment ranking in June, according to SWIFT’s RMB Tracker.
The renminbi was overtaken by the Canadian dollar (CAD), commonly referred to as the ‘loonie’, which accounted for 1.96% of international payments to enter the top five most traded currencies. The RMB was marginally behind with a 1.72% share of international payments.
Despite this small hiccup, RMB internationalization remains on track. Over the past three years it has overtaken six currencies – including HKD, CHF and AUD – to increase its share of international payments exponentially.
SWIFT’s RMB Tracker also found that more than 1,200 banks used RMB for payments with China and Hong Kong in June 2016 – up by a fifth in just 12 months. Asia Pacific leads the way with 43% adoption, followed by the Americas at 42% adoption rate. Europe falls behind at 37% and the Middle East and Africa is at 34%.
There was also good news for the United Kingdom, which regained its status as the number one clearing centre after Hong Kong by processing a quarter of all RMB payments (excluding China and Hong Kong).
Overall, SWIFT remains optimistic about the RMB’s journey towards a more international currency. Alain Raes, Chief Executive, APAC & EMEA at SWIFT, explains that the journey towards full internationalisation is a long one, but “the creation of new offshore centres around the world combined with the progress of China’s new Cross Border inter-Bank Payments System (CIPS) will help move the RMB along its path towards internationalisation.”
For more insight and to download SWIFT’s latest RMB Tracker, please click here.