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Renminbi ranks #1 in Asia Pacific for payments with Greater China

Beidou2020

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SWIFT’s RMB Tracker shows that the RMB is now the most active currency used by Asia for payments with China and Hong Kong

Brussels, 27th May 2015 – SWIFT’s RMB Tracker shows that the value in weight of the RMB used for payments exchanged with China and Hong Kong within Asia Pacific increased by 327% between April 2012 and April 2015. During this three year period, the Chinese currency moved from position number five to the top currency used in Asia Pacific to do business with Greater China.

On average, 31% of payments in Asia Pacific with China and Hong Kong are now made in RMB, up from 7% in April 2012. This growth is driven by the increase of RMB usage in most Asian countries to trade directly with China and Hong Kong. Over three years, most Asian countries moved from being low users (under 10% RMB) to medium users (between 10% and 50%). Out of 26 countries, within the region and using the RMB for direct payments with China and Hong Kong, only nine are considered low users compared to 19 in 2012. Six countries are now considered high users of the currency.

“Asia Pacific is clearly paving the way forward when it comes to RMB adoption,” says Michael Moon, Head of Payments Asia Pacific at SWIFT. “Big trading partners like Singapore, Taiwan and South Korea have adopted the RMB for the majority of their payments with Greater China. The new appointments of four clearing centres (South Korea, Malaysia, Thailand and Australia) within the region should also have a positive impact on RMB adoption, solidifying the important role of the currency within Asia Pacific and abroad.”
Overall, the RMB remains in its position as the fifth most active currency for global payments and accounted for 2.07% of payments worldwide. Its activity share is higher than last month even though RMB payments decreased in value by -6.7% compared to April 2015, while at a global level, all currencies decreased in value by -8.2% over the same period.



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I think more Renminbi clearing banks and direct trading with more currencies (Brazil, India, Iran, etc) should be done.

Some progress:

By now China has signed 32 bilateral currency deals, total value of which exceeds ¥3.1 trillion (Yuan), with 32 major countries/regions. In decreasing order of scale, these include Hong Kong (¥400B), South Korea (¥360B), EU (¥350B), Singapore (¥300B), Australia (¥200B), Canada (¥200B), UK (¥200B), Brazil (¥190B), Malaysia (¥180B), Russia (¥150B), Switzerland (¥200B), Indonesia (¥100B), Argentina (¥70B), Thailand (¥70B), UAE (¥35B), Qatar (¥35B), South Africa (¥30B), and 15 others. The latest one signed with with Chile, value at ¥22B.

Since the 1st RMB offshore clearing banks was established in Hong Kong, other hubs were then developed progressively, covering Macau, Taipei, Singapore, London, Frankfurt, Seoul, Paris, Luxemberg, Doha, Toronoto, Sydney, Bangkok, Kuala Lumpur. Accumulated RMB clearing amount has reached ¥40 trillion (Yuan). The latest addition would be Santiago in Chile, the 1st ever RMB offshore clearing bank in Latin America.

Back to your question:

- Brazil yes, currency swap done, last batch was $190B, and the new clearing hub in Santiago would also come handy.

- With Iran, actually since years ago even before the sanction was lifted, China already pays in RMB (some through Russian banks) for a portion of the oil imports, Iran can use the currency for goods and services from China. Some are in form of barter (check Zhuhai Zhenrong) to bypass financial institutions. Closer tie with Iran (on oil, infrastructure, merchanise, defence) is expected and let's see how the situation unfold in the coming months, however the sanction issue is still quite delicate.

- Trade with India is neither significant nor of strategic importance (no strategic commodities e.g. energy; no long term investment involved), no special arrangement is needed.
 
Some progress:

By now China has signed 32 bilateral currency deals, total value of which exceeds ¥3.1 trillion (Yuan), with 32 major countries/regions. In decreasing order of scale, these include Hong Kong (¥400B), South Korea (¥360B), EU (¥350B), Singapore (¥300B), Australia (¥200B), Canada (¥200B), UK (¥200B), Brazil (¥190B), Malaysia (¥180B), Russia (¥150B), Switzerland (¥200B), Indonesia (¥100B), Argentina (¥70B), Thailand (¥70B), UAE (¥35B), Qatar (¥35B), South Africa (¥30B), and 15 others. The latest one signed with with Chile, value at ¥22B.

Since the 1st RMB offshore clearing banks was established in Hong Kong, other hubs were then developed progressively, covering Macau, Taipei, Singapore, London, Frankfurt, Seoul, Paris, Luxemberg, Doha, Toronoto, Sydney, Bangkok, Kuala Lumpur. Accumulated RMB clearing amount has reached ¥40 trillion (Yuan). The latest addition would be Santiago in Chile, the 1st ever RMB offshore clearing bank in Latin America.

Back to your question:

- Brazil yes, currency swap done, last batch was $190B, and the new clearing hub in Santiago would also come handy.

- With Iran, actually since years ago even before the sanction was lifted, China already pays in RMB (some through Russian banks) for a portion of the oil imports, Iran can use the currency for goods and services from China. Some are in form of barter (check Zhuhai Zhenrong) to bypass financial institutions. Closer tie with Iran (on oil, infrastructure, merchanise, defence) is expected and let's see how the situation unfold in the coming months, however the sanction issue is still quite delicate.

- Trade with India is neither significant nor of strategic importance (no strategic commodities e.g. energy; no long term investment involved), no special arrangement is needed.

I think these are the 4 main steps to Renminbi internationalisation:

1. Currency swaps.
2. Renminbi clearing banks.
3. Direct trading of Renminbi with foreign currencies.
4. Allow foreign access to invest into Renminbi-denominated onshore bond market and stock market.
 
So, JPY is the next target.

Once CIPS is in operation along with capital account being liberalised further, RMB will be 3rd by 2017. By 2020, I think it will overtake even the Euro considering the problems with the Euro.
The surge in use of RMB will be amazing.

Dollar's use will continue its decline, especially in payments that involves Mainland China & Hong Kong.
Right now more than 60 central banks hold RNM in their forex reserves.

Dollar butt kissers, will be in full denial mode about 'China can't do this, China can't do that, China will crash, China will disappear, China will fail' :lol:

China is already dominant in economics, now its time to be dominant in finance too.
 
Sure, just ask Vietnamese members here...Sino-Vietnam border trade Vietnanese welcome RMB much more than VND, at least China cash is a good thing in Vietnam better than their cash ... LOL!
 
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