SWIFT, a global provider of financial messaging services, has released its monthly compilation of data as part of its renminbi (RMB) tracker, with the latest figures showing an uptick in its share of RMB usage, in excess of 10% – at the present, over 57 countries have crossed this barrier by usage, illustrating the scope of the currency in 2016.
The RMB tracker has also shown that seven new countries have joined this list, with many far exceeding a 10% usage of the RMB for direct payments – over the past two years this list had not passed 50 countries, only recently expanding to new areas.
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The 10% milestone is significant, given the adopted and universal measure supported by SWIFT to measure the adoption of RMB payments by value with China and Hong Kong, relative to other currencies – the group refers to this phenomenon as ‘crossing the RMB river’. While the list of countries exceeding the 10% barrier is currently 57, SWIFT data shows that 101 countries in total utilize the RMB for payments in some capacity. The weight of these payments by value ultimately reaching 12.9% as of September 2016.
The seven new countries to cross the 10% barrier, as measured by SWIFT, are Spain, Bolivia, Colombia, Mozambique, Namibia, Kuwait, and Georgia, all inconsequential trade partners with China. As of September 2016 however, the RMB kept its position as the fifth most active currency for global payments by value, with an increased share of 2.03%, relative to 1.86% last month – only briefly this year did it relinquish the fifth slot to the Canadian dollar (CAD).
According to Astrid Thorsen, Head of Business Intelligence Solutions, SWIFT, in a recent statement on the latest data: “Over the last two years, we have witnessed a continued increase in RMB usage for direct payments with China and Hong Kong, with most of the growth coming from early adopters and main RMB clearing centres, such as Singapore, the United Kingdom and South Korea.”
“On the other hand, two of the largest economies in the world1 and important trade partners with China, United States and Japan, still show low RMB adoption. The latest announcement related to the appointment of the first RMB clearing centre in the United States should positively impact the country’s RMB usage,” he added.