SWIFT’s latest RMB Tracker shows that Canadian corporations have been slow to start using RMB for cross-border payments
Recent data from SWIFT’s RMB Tracker shows that RMB usage in North America is low compared to the rest of the world, despite initial growth following the opening of RMB offshore clearing centres in Toronto and New York.
With the occasion of Sibos 2017 taking place in Toronto, a special edition of the RMB Tracker has been published. This report focuses on the increased presence of enablers for RMB usage in the Americas and includes statistics and analyses for the year as well as insights from financial industry experts on the recent evolution of the RMB and other currencies for cross-borders flows.
Since November 2014, when the RMB offshore clearing centre opened in Toronto, traffic between Canada and China/Hong Kong has increased despite the fact that the Canadian dollar is most preferred. Moreover, 70% of cross-border payments, by value, sent between Canada and China/Hong Kong are made using the Canadian dollar, followed by the RMB at 15% with the U.S. dollar accounting for only 1%.
Though RMB usage for payments is low, SWIFT’s data shows that RMB traffic between Canada and China/Hong Kong has grown by 67% since the opening of the RMB offshore clearing centre in November 2014.
Additional RMB highlights from the report include:
- USD Ranked #1: as a world payments currency with 39.79% share by value; and
- 93.7% of RMB payments by value, initiated in the U.S. and Canada and ending in China/Hong Kong are cleared in Hong Kong.
Data from the report also suggest that here is no significant correlation between the size of a country’s economy and the usage of its currency for international payments and clearing. For example, the U.S. accounts for about 25% of global GDP and the US dollar has an activity share of 39.79%. While China accounts for 15% of global GDP, the RMB is used for less than 2% of international payments.
Based on recent data, the gap between the global usage of the USD and RMB is unlikely to be sustainable, particularly as the Chinese economy continues to grow and develop broader capabilities for internationalisation of the RMB.
Michael Moon, Head of Payments Markets, APAC adds, “Although the world remains highly dollarised, the growing prominence of the Chinese economy supports a case for greater RMB usage internationally. Liberalisation of capital markets in China, and initiatives such as the Belt and Road – over time, will contribute to further RMB globalisation.”
Please click here to download a copy of SWIFT’s special edition RMB Tracker report.
Since 2010, SWIFT has actively supported its customers and the financial industry regarding RMB internationalisation through various publications and reports. Through its Business Intelligence Solutions team, SWIFT publishes key adoption statistics in the RMB Tracker, insights on the implications of RMB internationalisation, perspectives on RMB clearing and offshore clearing guidelines, supports bank’s commercial RMB product launches and provides in-depth analysis and business intelligence, as well as engaging with offshore clearing centres and the Chinese financial community to support the further internationalisation of the RMB.
The SWIFT network fully supports global RMB transactions, and its messaging services enable Chinese character transportation via Chinese Commercial Code (CCC) in FIN or via Chinese characters in MX (ISO 20022 messages). It offers a suite of dedicated RMB business intelligence products and services to support financial institutions and corporates. In addition, SWIFT collaborates with the community to publish the Offshore and Cross-Border RMB Best Practice Guidelines, which facilitate standardised RMB back office operations.
Please click here for more information about RMB Internationalisation or join our ‘Business Intelligence Transaction Banking’ LinkedIn group.
SWIFT is a global member-owned cooperative and the world’s leading provider of secure financial messaging services. We provide our community with a platform for messaging, standards for communicating and we offer products and services to facilitate access and integration; identification, analysis and financial crime compliance. Our messaging platform, products and services connect more than 11,000 banking and securities organisations, market infrastructures and corporate customers in more than 200 countries and territories, enabling them to communicate securely and exchange standardised financial messages in a reliable way. As their trusted provider, we facilitate global and local financial flows, support trade and commerce all around the world; we relentlessly pursue operational excellence and continually seek ways to lower costs, reduce risks and eliminate operational inefficiencies. Headquartered in Belgium, SWIFT’s international governance and oversight reinforces the neutral, global character of its cooperative structure. SWIFT’s global office network ensures an active presence in all the major financial centres.