Importance of RMB as an International Currency Has Fallen Since 2016, Says Natixis

The use of the RMB as an international currency is particularly relevant as a medium of exchange in the private sector domain  However, its importance has fallen since 2016, according to Natixis’ RMB Internationalization Monitor.

Among all the uses, trade is the most relevant but the settlement amount has edged south steadily since 2015 Q3.

The total amount of RMB assets held by overseas investors has dropped to around RMB 3 trillion (USD 430 billion) last year, falling more than RMB 1.5 trillion from the peak back in May 2015, says the report.

Still, the trend has been very different across assets: bond holdings have raised to the highest level in years but the sharp decrease in RMB deposits dragged the headline figure.

The international use of the RMB as an unit of account has lagged even further behind (especially in the private side) as many imported goods are still invoiced in USD. The key exception, on the official side, is the final inclusion of RMB into the SDR basket in October 2016, taking up a weight of 10.9%.

In terms of the standard of deferred payment, corporate bonds denominated in RMB has been raising but the development is less positive on the sovereign side.

Finally, RMB offshore centers have seen their importance decrease, that is even more true for the largest of all - Hong Kong. RMB deposits in Hong Kong have been trending down substantially but amount of RMB outstanding loans is hovering at the highest value (but shrinking in share). 

 

 

 

 

 

 

 

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