SWIFT's latest RMB Tracker shows that over the past two years, international RMB payments between ‘true offshore' trading centers (excluding China and Hong Kong) have grown by +837% in value, compared to an overall growth of +378%, reaching a share of 3.25% in September 2014.
True offshore international RMB payments are transactions taking place between RMB centres (e.g. Singapore, United Kingdom, Luxembourg, etc.) without involving China and Hong Kong.
Based on the RMB Tracker, clearing centers such as Singapore, United Kingdom and the newly appointed German centre are driving true offshore use of the RMB.
Other countries, such as Belgium that are not normally part of the RMB top ten, are also fuelling this offshore trend. Belgium currently sits fourth for true offshore RMB international payments.
Over the last nine months, SWIFT has noted a significant increase in all RMB offshore centers with Singapore holding its leading position at +574% growth, followed by Luxembourg (+517%) and the United Kingdom (+236%).
"Payments, FX and trade finance are the markers to watch for growth in RMB internationalization," says Alex Medana, Director, Securities Markets, Asia Pacific, SWIFT. "The RMB is primarily used as a trade settlement currency, but it is worth noting that the RMB is steadily making progress as an investment currency.
Medana adds that in the first nine months of 2014, 28% of securities settlement confirmations in RMB were done outside China and Hong Kong, compared to 16% during the same period two years ago.
Overall, the RMB strengthened its position as the seventh-ranked global payments currency and accounted for 1.72% of global payments, an all-time record share. In September 2014, the value of RMB global payments increased by 13.2%, well above the average 8.1% growth for all currencies.