RMB Usage Sees Decline in October, Falls to Sixth Most Utilized Currency

The RMB has lost ground in the international payments realm, falling to the 6th spot, behind the Canadian dollar.

SWIFT, a global provider of financial messaging services, has released its monthly compilation of data as part of its renminbi (RMB) tracker, with October 2016 showing an erosion of RMB usage and a strengthening of the euro.

While the RMB has shown steadfast growth in recent years, its usage in international trade finance has slipped slightly in the payments realm, with RMB usage by value declining to the third-most utilized currency – the top two remain the euro and USD in first place.

Join the iFX EXPO Asia and discover your gateway to the Asian Markets

Since the RMB tracker’s inception in 2011, the RMB has certainly orchestrated a rise in value, though it had peaked at the number two most utilized currency back in 2013, with a share of 8.66%. However, since October 2012, trade finance values in the RMB have decreased by a factor of -66.0%, while trade finance across all currencies decreased in value by 35%.

Suggested articles

Crypto Daily Sponsors Singapore’s 2019 Run for Light EventGo to article >>

The latest findings run counter to a recent uptick in RMB usage seen last month in September, in which the Chinese currency had been gaining traction in several Asian and Latin American (LATAM) countries. Overall, the RMB now retains the sixth slot globally, losing its place to the Canadian dollar (CAD). The total vaue of RMB payments decreased by 22.44% compared to September 2016, whilst in general all payments currencies decreased by only 5.96%.

Michael Moon
Michael Moon

According to Michael Moon, Head of Payments Markets, Asia-Pacific (APAC), SWIFT, in a recent statement on the tracking info: “The general slowdown of the Chinese and world economies over the past few years has impacted global trade growth across all currencies, not just the RMB. For example, commodities trade growth has been declining as evidenced by the reduction of documentary trade.”

“On a positive note, the inclusion of the RMB in the Special Drawing Right (SDR) basket should generate further trust and confidence in the RMB currency and support further RMB internationalization,” he added.

Got a news tip? Let Us Know