SWIFT, a global provider of financial messaging services, has reported the results of its RMB Tracker in the United Arab Emirates (UAE) and Qatar, which highlighted the RMB as the most active currency used for direct payments with China and Hong Kong, according to a SWIFT statement.
With the use of the RMB on the rise globally, it comes as no surprise that financial hubs in the UAE and Qatar are utilizing the Chinese currency more frequently – this includes its use in regard to direct payments with China and Hong Kong.
In terms of worldwide usage, during the month of December 2015, the RMB remained as the fifth most active currency for global payments by value, accounting for 2.31% of global payments. This marks a tepid increase in market share from 2.28% in November 2015. Overall however, RMB payments value increased by 15.92% compared to November 2015, compared to a generalized payments currency increase of 14.43%.
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For the 2015 year, the UAE’s utilization of the RMB accounted for nearly 74% of payments by value to China and Hong Kong, justifying an increase of 52% YoY when compared to 2014. By extension, in Qatar, the RMB was used for 60% of all payments, constituting a surge of 247% YoY from 2014, according to SWIFT’s currency tracker.
Despite the RMB’s steadfast rise in popularity, SWIFT’s data shows that the majority of payments between the UAE and Qatar and China/Hong Kong are still in USD and subsequently intermediated, primarily by USD clearing banks.
According to Sido Bestani, Head of Middle East, Turkey and Africa at SWIFT, in a recent statement on the data: “Use of the RMB has been rising across the Middle East region over the last few years. Adoption has been supported by developments such as the establishment of an RMB clearing centre in Qatar last year. We anticipate these and similar efforts will continue to drive RMB adoption across the region.”
Last week, SWIFT unveiled a new global payments innovation initiative, heralded by the membership of forty-five leading banks and investing institutions. More specifically, the program consisted of a collection of banks that enrolled in SWIFT’s global payments initiative, including leading players from every major financial nexus and economic bloc in the world, including Europe, Asia-Pacific (APAC), Africa, and the Americas.