Yuan adoption by global financial institutions hits nearly 40%

[onebyone]

BY ASIA UNHEDGED on MARCH 31, 2016 in ASIA UNHEDGED, CHINA

The Chinese currency has nearly reached 40% adoption across financial institutions worldwide, an 18% increase in yuan (RMB) usage over the past two years, with the strongest growth in occurring in the Americas, according to SWIFT’s monthly RMB Tracker released Thursday.

In February 2016, 1,131 banks used the yuan, also known as the Renminbi, for payments with China and Hong Kong, this represents 37% of all institutions exchanging payments with China and Hong Kong across all currencies. The majority of these institutions are located in Asia-Pacific (557), followed by Europe (376), the Americas (124) and then Africa and Middle East (74).

Compared with February 2014, the Americas saw the strongest growth at 31%, followed by 18% growth in the Asia-Pacific region, Europe grew almost as much at 17% and the Africa – Middle East region grew 12%.

“With almost 40% of international financial institutions facilitating yuan payments, it is clear that the Chinese currency is growing in its role as a global trade, investment, and reserve currency,” Vina Cheung, global head of RMB Internationalization, at HSBC, said in a written statement.

The SWIFT data also said that 24% of the offshore yuan payments done with China and Hong Kong are handled by Chinese banks with offshore branches and/or subsidiaries.

“As China continues to open up its currency, it makes sense that its global usage has increased in the last two years, including by US businesses,” Debra Lodge, head of RMB business development North America at HSBC Bank USA said in a written statement.

“More US companies are now confident in using Renminbi and have been effectively doing so for the benefit of their business. We expect these volumes to increase as companies look to mitigate risk and reduce costs in areas such as the purchase of goods and inter-company payables,” she added.

As of February 2016, the yuan was the fifth-most-active currency for global payments by value with a share of 1.76%. This represents a decrease of 27.5% compared to January 2016. Payments across all currencies decreased in value by 1.3% during the same period.

The January-February decline was blamed on Chinese banks closing during the Lunar New Year in early February.

SWIFT is a Belgian-based provider of secure financial messaging services, connecting more than 11,000 banking and securities organizations, market infrastructures and corporate customers in more than 200 countries and territories. SWIFT’s network fully supports global RMB transactions.

Yuan adoption by global financial institutions hits nearly 40% – Asia Times

 

[somebozo]

this is dangerous for dollar dominance and its sheer value as the most sought after capital...What the Germans failed may be succeeded by Chinese if it does not trigger another world war!

 

[TaiShang]

this is dangerous for dollar dominance and its sheer value as the most sought after capital...What the Germans failed may be succeeded by Chinese if it does not trigger another world war!

At least it is different now. In another world war, they know there won't be a one-sided suffering, but two eyes for an eye.

If they are ready to die for USD, they should not hesitate to start one.

 

[jhungary]

Think this news is posted somewhere already.

And, again, only 40% acceptance worldwide is a worrying trend for RMB, bear in mind they were slate to become one of the basket currency later this year, also bear in mind the 37% were for payment for China and Hong Kong, which both territories of China, it should have been more (A lot more) than 40% settle with RMB.

I mean, If I send money from the US to China, I would have send RMB instead of USD, but according to this news, only 37% of people did so (Sending RMB to China and Hong Kong), this is quite alarming.

 

[jhungary]

A typical sore loser post by the American

How is stating the fact a "Loser"?

I work in Australia, if I want to send money back to the US to my cousin for emergency, would I send Australian dollar to him? Same thing it does if I were to send money to Hong Kong and China if I live overseas, I would have expected to send RMB or Hong Kong Dollars. In fact, all the Australian and US transaction I made in the previous 13 years to China and Hong Kong are with RMB and HKD, and now, you have a source saying only 40% of all people involving in transaction doing this? If this is not alarming, then what is?

And congrat on your 10th negative.

In February 2016, 1,131 banks used the yuan, also known as the Renminbi, for payments with China and Hong Kong, this represents 37% of all institutions exchanging payments with China and Hong Kong across all currencies. The majority of these institutions are located in Asia-Pacific (557), followed by Europe (376), the Americas (124) and then Africa and Middle East (74).

 

[Beast]

How is stating the fact a "Loser"?

I work in Australia, if I want to send money back to the US to my cousin for emergency, would I send Australian dollar to him? Same thing it does if I were to send money to Hong Kong and China if I live overseas, I would have expected to send RMB or Hong Kong Dollars. In fact, all the Australian and US transaction I made in the previous 17 years to China and Hong Kong are with RMB and HKD, and now, you have a source saying only 40% of all people involving in transaction doing this? If this is not alarming, then what is?

And congrat on your 10th negative.

This post is about increase percentage of RMB exposure in market and you twisted as failure?

If we used your above scenario, most countries fails 90% under your alarm mode. So all of them needs to close shop? And you always expect everything to be build in a day? So if US tomorrow failed to land a man in Mars is considered a failure in space advancement? Becos under ur analogy, it needs immediate result. You are just applying double standard here to suit yr anti China agenda.

 

[jhungary]

This post is about increase percentage of RMB exposure in market and you twisted as failure?

If we used your above scenario, most countries fails 90% under your alarm mode. So all of them needs to close shop? And you always expect everything to be build in a day? So if US tomorrow failed to land a man in Mars is considered a failure in space advancement? Becos under ur analogy, it needs immediate result. You are just applying double standard here to suit yr anti China agenda.

First of all, this is not "Increased" exposure of RMB, at least not on a "Global" level. It is a banking transaction made overseas with RMB. It exposed nothing. As I said, would you expect to send USD to China and Hong Kong?

Second of all, I did not say China fail, you did

Third of all, China have 17 years to have Hong Kong's economic system felt in line with China, it is not an "immediately" result. Oh, care to think what other currency was used in >60% of truncation to China and Hong Kong?

 

[Beast]

First of all, this is not "Increased" exposure of RMB, at least not on a "Global" level. It is a banking transaction made overseas with RMB. It exposed nothing. As I said, would you expect to send USD to China and Hong Kong?

Second of all, I did not say China fail, you did

Third of all, China have 17 years to have Hong Kong's economic system felt in line with China, it is not an "immediately" result. Oh, care to think what other currency was used in >60% of truncation to China and Hong Kong?

It is not usual, how many countries conducted more than 50 percent of their transaction with their own currency?

And China is a country true to her words. Hong Kong will continue enjoy her anotomous status untouched for 50 years since 1997. As if China can come in and make a 180 degrees change she deem on her financial system.

 

[jhungary]

It is not usual, how many countries conducted more than 50 percent of their transaction with their own currency?

You are asking a different question altogether. The question I raised and the OP Article said is FOR PAYMENT TO CHINA AND HONG KONG, not payment FROM China and Hong Kong (Do Check my quote 2 post ago). Those payment are incoming, not outgoing. Why would someone send USD to China if you cannot spend it in China? Or did China accept USD as their legal tender as well?

You pay someone else, you usually use their local currency. The same fact is that if I were in China right now, I would not send RMB to Australia, simply I cannot spend RMB in Australia.

So to answer your question, unless there exist a country have a legal tender that is not their own currency, then 100% of the country in this world have more than 50% INCOMING transaction with their own currency.

And China is a country true to her words. Hong Kong will continue enjoy her anotomous status untouched for 50 years since 1997. As if China can come in and make a 180 degrees change she deem on her financial system.

Dude, What the heck are you saying.

Fall in lines does not mean you need to forcibly enforce your own economic rules on other, British Financial system is said to be inline and compatible with the EU, that does not mean British Pound have to cease and British need to adopt the Euro. In fact, most of the country in EU have their own independent financial system albeit using the same currency.

 

[TaiShang]

China's new yuan loans rise in March
Xinhua, April 15, 2016

A bank staff member counts Chinese currency Renminbi (RMB) at the Beijing Branch of the Bank of Communication in Beijing, capital of China. [Photo/Xinhua]



China's new yuan-denominated lending in March amounted to 1.37 trillion yuan (210 billion U.S. dollars), 188.3 billion yuan more than a year earlier, official data showed Friday.

In the first quarter (Q1), China's new yuan loans rose to 4.61 trillion yuan, up 930.1 billion yuan from a year earlier, the People's Bank of China (PBOC) said in a statement on its website.

Outstanding lending stood at 98.56 trillion yuan at the end of March, up 14.7 percent year on year.

The M2, a broad measure of money supply that covers cash in circulation and all deposits, rose 13.4 percent year on year to 144.62 trillion yuan at the end of March, according to the statement.

The narrow measure of money supply (M1), which covers cash in circulation plus demand deposits, rose 22.1 percent year on year to 41.16 trillion yuan.

The M0, the amount of money in circulation, stood at 6.47 trillion yuan, a year-on-year increase of 4.4 percent. The central bank pumped 143.5 billion yuan of cash into the market in the first quarter.

Newly-added social financing, a measurement of funds that non-financial firms and households get from the financial system, in March stood at 2.34 trillion yuan, 1.51 trillion yuan more than February and 1.09 trillion yuan more than the same period last year.

In Q1, newly-added social finance came in 6.59 trillion yuan, 1.93 trillion yuan more than the same period last year.

At the end of March, yuan-denominated deposits stood at 141.12 trillion yuan, up 13 percent year on year. In the first quarter, yuan-denominated deposits gained 5.41 trillion yuan.

By the end of March, total outstanding loans stood at 103.79 trillion yuan, up 13.4 percent from the previous year, the PBOC said.

The growth of M1 is an indication of abundant market liquidity and that the real economy has been relatively stable, said Sheng Songcheng, director of the central bank's surveys and statistics department.

The new lending data has been widely watched as the market is speculating whether and when the central bank might unveil more easing policies to support the lukewarm economy.

"With growth once again underpinned by rising credit, concerns about medium-term stability increase," said Tom Orlik, chief Asia economist of Bloomberg.

The country's GDP grew 6.7 percent year on year to reach 15.9 trillion yuan in Q1 2016, the National Bureau of Statistics (NBS) said Friday.

The growth further narrowed from the previous quarter's 6.8 percent, which was already the lowest quarterly rate since the global financial crisis.

The figure was, however, in line with market expectations and remained within the government's targeted range of between 6.5 and 7 percent for 2016.

With credit accelerating and growth stabilizing, the urgency to push ahead with monetary easing is reduced, while fiscal policy will do more of the work, according to Orlik.

 

[Tauren Paladin]

The RMB only entered the reserve basket last November. It needs more time, like 5 to 10 years.

 

[xunzi]

Think this news is posted somewhere already.

And, again, only 40% acceptance worldwide is a worrying trend for RMB, bear in mind they were slate to become one of the basket currency later this year, also bear in mind the 37% were for payment for China and Hong Kong, which both territories of China, it should have been more (A lot more) than 40% settle with RMB.

I mean, If I send money from the US to China, I would have send RMB instead of USD, but according to this news, only 37% of people did so (Sending RMB to China and Hong Kong), this is quite alarming.

We only start to have free flow of yuan for the last 2 years. And two, you don't quite understand how trade works. Let me teach you.

When two countries are in trade, there are simply two things that can happen.

1. If there is a currency swap, they pay each other using local currency.
2. They use SDR or the international acceptable currency for trade. For example, nobody would accept the Vietnam Dong unless they find a use for toilet paper. If Vietnam wants to buy stuffs from others, they have to pay in foreign currency that they have in reserves (mostly USD or any currency in SDR basket).

 

[jhungary]

We only start to have free flow of yuan for the last 2 years. And two, you don't quite understand how trade works. Let me teach you.

When two countries are in trade, there are simply two things that can happen.

1. If there is a currency swap, they pay each other using local currency.
2. They use SDR or the international acceptable currency for trade. For example, nobody would accept the Vietnam Dong unless they find a use for toilet paper. If Vietnam wants to buy stuffs from others, they have to pay in foreign currency that they have in reserves (mostly USD or any currency in SDR basket).

lol, if you have to teach me, you need to first understand what I said.

I am not talking about Floating RMB international when I put Hong Kong in the same picture, RMB and HKD can freely spend in both country long before RMB being able to float and buy in international market. I can still remember 20 years ago I spend HKD in a mall in Shenzhen.

I am not talking about Currency either, I am talking about the way Hong Kong and China deal business, the transaction, for example, you cannot directly send money (TT) from any bank in Hong Kong to China, to do so, even today, you need to send thru an intermediate bank (BOC) and bridge between the banking system in Hong Kong and China.

1.) Currency Swap does not matter in this situation. Hong Kong Dollar is currently pegged (Not swapped) with USD, and until one day (Which should happen a long time ago) HKD unlinked to USD and either pegged or free float to RMB, what you said cannot happen.

2.) Does not applies as I am talking about Banking between Hong Kong and China, which they are counted differently in OP's article and the majority of Transcation using RMB between China and Hong Kong is with each other.

YOu have no idea who currency and financial work, and LOL at you trying to taught me a lesson