2013年-SWIFT环球同业银行金融电讯_ Financial_centres_jockey_for_position_amid_renminbi039s_growth_2页_400kb

Financial Centres Jockey for Position Amid Renminbi's Growth

Core Content

The renminbi (CNY) has been experiencing significant growth in its usage as a global payments currency, prompting financial centres worldwide to compete for dominance in the offshore renminbi market. This growth is driven by the increasing role of Chinese companies in the global economy and the gradual liberalization of capital and currency controls by Chinese policymakers.

Key Statistics

• Over 1000 financial institutions in 130 countries now engage in renminbi transactions.
• Since June 2010, the proportion of China's cross-border trade settled in renminbi has increased to 10%.
• In October 2012, the renminbi accounted for 24% of payments with China and Hong Kong, reaching its highest ever level.
• By November 2012, the renminbi ranked 14th among the world's most used currencies.
• Institutional transfers make up the majority of renminbi payments, with 98% in the UK and 94% in Singapore.

Main Trends and Developments

• Growth Spurts: The renminbi saw a 874% increase in usage between October 2010 and July 2011, and a 24% increase in October–November 2012.
• Offshore Hubs: Financial centres are competing to become the leading offshore hubs for renminbi payments. Hong Kong remains the largest, processing 80% of cross-border renminbi payments, but others like London, Singapore, and Taiwan are also emerging as key players.
• Market Share Shifts:
  • London overtook Singapore as the second-largest offshore renminbi centre, with its market share increasing from 26% to 28% between June and September 2012.
  • Singapore saw a 22.7% decline in payments during the same period.
  • Taiwan has rapidly increased its market share, rising from 57th in July 2011 to 7th by mid-2012, and reaching 28% of total payments with China and Hong Kong by November 2012.
• Regional Adoption:
  • Strong performers include the Gulf countries, Singapore, and the UK.
  • Adoption in the US and Japan has remained low.
• Market Volatility:
  • In September 2012, renminbi payments declined for the second consecutive month, pushing it to 16th in the global currency rankings.
  • However, a 24% increase in the month to November 2012 helped it regain the 14th position, with a market share of 0.56%.

Outlook

Despite its small market share compared to major currencies like the euro (40.89%), the long-term trend indicates that the renminbi will continue to rise in global usage. The competition among financial centres for renminbi clearing and payment business is intensifying, with London currently leading the charge. The currency clearing memorandum of understanding between China and Taiwan is expected to further boost Taiwan's adoption of the renminbi.

The future of the renminbi's global role will depend on policy decisions, market acceptance, and the ability of financial centres to adapt and offer competitive services in the renminbi ecosystem.