London Ranks First for Offshore RMB FX Transactions

Recent data from SWIFT’s RMB Tracker shows that London has retained its position as the preeminent foreign exchange (FX) and payment centre globally. It remains the dominant offshore hub for trading the Chinese renminbi (RMB).

With the occasion of the SWIFT Business Forum London taking place on 25 April 2017, a special edition of The RMB Tracker has been published.

This report focuses on the City of London as an offshore RMB hub and includes statistics and analysis for the first three months of the year as well as insights about the RMB and the state of play in London’s FX market.

As of March 2017, SWIFT’s data shows that 36.3% of the RMB FX transactions (excluding China) are conducted with the UK. Hong Kong is second (29.3%) and the United States and France third (7.3%) ahead of Singapore (5%).

There has also been a steady increase in RMB FX transactions over the last five years, with the number of FX trades in RMB reaching more than 13 million in 2016.

RMB ranks fifth as a world FX currency in terms of trading value, behind the USD, EUR, JPY and GBP.  RMB and USD is the fifth highest currency pair in nominal amount for trades not settled in CLS.

Monthly turnover of the RMB has reached over 4.3% of total turnover confirmed over SWIFT as of March 2017).

Trading and payments in RMB in the UK also continues to grow, supported by usage of the RMB in both global and domestic markets.

While payments to and from the UK transverse a multitude of markets around the world, SWIFT data shows that the UK-US corridor was the most important, accounting for 38% of international payments sent and received by the UK in March 2017.

More than 50% of UK payments transactions (all currencies) are conducted with two countries, US (38%) and Germany (16%).

RMB is the top currency for payments between the UK and China/Hong Kong, while 50% of financial institutions in the UK (and 1,300 financial institutions around the world) are using the RMB to exchange payments with Hong Kong and China.

London is the largest RMB payments center outside of greater China with a 5.66% share (behind Hong Kong with a 76.14% activity share but well above Singapore at 4.19%).

“This data demonstrates that London is a top choice for international banking activity,” says Javier Pérez-Tasso, Chief Executive, Americas and UK, SWIFT. “Despite a decline in global FX trading volumes and broader market uncertainties, London’s role as a global financial centre and international payments hub remains on a strong footing."

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