According to the report of SWIFT on January 28, the Renminbi (RMB) overtook the Canadian and Australian dollar as a global payment currency in November 2014, and now becomes the fifth payment currency of the world.

 

In the report SWIFT points out that in December 2014, the RMB reached a record high share of 2.17% in global payments by value and now trails the Japanese Yen which has a share of 2.69%. The top three payment currencies are the US dollar, EURO and British pound.

 

“The RMB breaking into the top five world payment currencies is an important milestone,” says Wim Raymaekers, Head of Banking Markets at SWIFT. “It is a great testimony to the internationalization of the RMB and confirms its transition from an ‘emerging’ to a ‘business as usual’ payment currency.”

 

The rise of various offshore RMB clearing centers around the world, including eight new agreements signed with the People’s Bank of China in 2014, was an important driver fuelling this growth, says SWIFT.

Overall, global RMB payments increased in value by 20.3% in December 2014, while the growth for payments across all currencies was 14.9%. The RMB has been showing a consistent three digit growth over the past two years with an increase in value of payments by 321%. Over the last year, RMB payments grew in value by 102% compared to an overall yearly growth for all currencies of 4.4%.

 

According to the data about the market shares of RMB in the global payment market released by SWIFT, RMB has an increasing market share and rising position in the global payment currencies. In February 2013, the RMB was ranked at position No.13, overtaking the Russian ruble and the Danish krone. In January 2014, its position was lifted to No. 7, and retaining at No.7 in the following several months. In September 2014, SWIFT’s RMB Tracker shows that one third of the financial institutions across the globe are using RMB as the payment currency for payments to the Chinese mainland and Hong Kong. The RMB payment in value showed a two-digit growth in the past two years. The financial institutions using RMB as the payment currency to the Chinese mainland and Hong Kong increased by 35%.

 

Previously the International Monetary Institute of Renmin University of China predicted in the RMB Internationalization Report 2014 that RMB is expected to become the third payment currency before 2020, following the US dollar and EURO.

 

Source: Nanfang Daily, January 29, 2015