Chinese Renminbi Payments Fail to Take Off in US
While the world’s major offshore corridors continue to expand payments in the Chinese renminbi (RMB), the US remains flat, trending towards a decline, according to data released by SWIFT showing currency volumes across its systems.
RMB adoption in the US was flat throughout 2012, with year-end figures pointing towards a sharp decline, SWIFT reports. From November to December 2012, the US experienced a 38% decrease in RMB payments, dropping the US three positions to rank sixth in offshore RMB countries. According to SWIFT data traffic, the top five offshore RMB countries are now the UK, Singapore, Australia, France and Luxembourg.
“We expect that most US flows we currently see in RMB are non- trade related and are subject to more variability than countries with strong underlying trade flows like Europe so this is not unexpected,” said Lisa O’Connor, RMB director for SWIFT. “RMB as an invoicing currency between the US and China needs to overcome a number of challenges including inertia and systems set up to invoice only in US dollars (USD).”
In December 2012 the US represented 4.1% of RMB payments by value, versus 6.6% in November 2012 (excluding China and Hong Kong). In December 95.5% of the payments value between the US and China/Hong Kong was still performed in USD, with only 0.3% in RMB.
Overall RMB payments decreased by 4.2% between November and December 2012, versus an average decrease of 5.7% across all currencies. Despite this, the RMB remains fourteenth in world currency rankings, with an all-time high market share of 0.57% in SWIFT payments (versus 0.56% in November 2012).