Global yuan payments increasingly handled by offshore hubs beyond Hong Kong: SWIFT

30 Mar10:59 AM

[HONG KONG] Global payments in the Chinese yuan are increasingly being handled by offshore yuan hubs besides Hong Kong, as more clearing banks have been assigned in the past two years, transaction services organisation SWIFT said on Monday.

Though Hong Kong still takes the lion's share with over 70 per cent of the market by value, offshore centres excluding Hong Kong handled 25 per cent of global yuan payments in February, compared to 17 per cent two years ago.

Singapore and London, which are strong financial centres in their respective regions, played a key role in driving yuan adoption outside of Hong Kong, SWIFT said.

Yuan usage has accelerated with the emergence of other offshore yuan clearing centres worldwide, including several countries outside of the Asia-Pacific, SWIFT added. "The use of RMB by more countries, beyond Hong Kong, is a good testimony to the internationalisation of the Chinese currency," said Michael Moon, head of payments Asia-Pacific at SWIFT.

The world's second-largest economy has appointed yuan clearing banks in a total of 14 offshore yuan hubs so far, most of which in 2014.

However, the yuan fell to the seventh place as a world payment currency in February with a share of 1.81 per cent, down 20.4 per cent from a month earlier, likely due to seasonal effect of the Lunar New Year.

Payments across all currencies decreased in value by 9.3 percent for the same period, given February is a shorter month.

The yuan broke into the top five as a world payment currency in November, overtaking the Canadian dollar and the Australian dollar.

REUTERS