RMB accounts for 11.2% of payments value: SWIFT

Photo taken on March 16, 2014, shows yuan (C) and other currencies in the picture. [Photo/IC]

China's currency, the renminbi (yuan), was used for 11.2 percent of total payments value between China and the rest of the world last month, up from 6.2 percent 18 months ago, Belgium-based global payment services company SWIFT said late Wednesday in a statement.

SWIFT's latest renminbi tracker showed that 15 countries are now using the yuan for more than 10 percent of their payment value with Chinese mainland and Hong Kong compared to April 2013.

In total, 50 countries out of the 161 that exchanged payments with Chinese mainland and Hong Kong last month have crossed the 10 percent threshold, SWIFT data shows.

The 10 percent milestone, also known as "crossing the renminbi river", is a threshold set by SWIFT to measure the weight of yuan payments value with Hong Kong and Chinese mainland compared to other currencies. It is an indication of countries that cross the river and their level of adoption of the renminbi.

Since April 2013, Germany increased its yuan usage with Chinese mainland and Hong Kong by 151 percent. Yuan payments by Canada (up 346 percent) and Malaysia (up 48 percent) are expected to grow even further following the latest announcements of a currency swap agreement and a memorandum of understanding (MoU) with the Chinese central bank, SWIFT data showed.

Compared to April 2013, the Chinese currency has crossed the river threshold with a growth of 181 percent, reaching 11.2 percent of total payments in value exchanged with Chinese mainland and Hong Kong, it said.

Over the last 18 months, there was a significant increase in yuan usage for payments with Chinese mainland and Hong Kong, said head of SWIFT business intelligence Astrid Thorsen.

Most of this growth is from early adopters and main yuan clearing centers, such as Singapore and the United Kingdom, but increasingly, new countries such as Germany, Australia, Malaysia, Indonesia and Sweden are contributing to the renminbi's growth, he said.

"This is a good sign for yuan adoption rates and internationalization," Thorsen said.

Overall, the renminbi kept its position as the seventh-ranked payments currency in the world last month, despite a decreased market share from 1.72 percent to 1.59 percent, SWIFT said.

In October, the value of yuan global payments value decreased by 7.2 percent which is below the average growth of 0.4 percent for all currencies, SWIFT data showed.

The SWIFT Renminbi Tracker, launched in September 2011, provides monthly reporting on key statistics to understand the progress made by the yuan toward becoming an international currency.