The Chinese renminbi (RMB) is continuing its move towards becoming a major international payments currency, according to the latest RMB tracker index issued by SWIFT.
In December 2012, the RMB was larger than the Danish krone (DKK), South African rand (ZAR) and New Zealand dollar (NZD) and has now overtaken the Russian rouble (RUB) to take 13th position in the ranking of world payments currencies.
SWIFT reports that RMB payments grew in value by 171% between January 2012 and January 2013. The last month alone saw a 24% increase, against 13% across all currencies, propelling it to an all-time high market share of 0.63%. In the same year, the Russian Rouble (RUB) grew by only 18% and lost 5.4% in the last month, making it drop to 0.56% market share.
“We’ll have to see if the drop in RUB is systemic,” said Lisa O’Connor, global RMB director at SWIFT, “but it is clear that offshore centres like Hong Kong, London and Singapore are fuelling RMB payments. RMB payments in Singapore grew by 123% year-on-year and by 33% in the last month.
“The recent appointment of Industrial and Commercial Bank of China [ICBC] as the RMB clearing bank in Singapore can only support that. Given the acceleration of RMB payments it will be interesting to see if the RMB displaces the Thai baht [THB] in coming months.”