A total of 31 countries are now using renminbi for at least 10% of their payments with China, according to SWIFTs RMB Tracker. That amounts to more than 20% of the 158 countries that transact with China.
In July, RMB moved up one position to become the 15th most used payment currency. Its market share totaled 0.45%, up 0.02% from June. Renminbi overtook the South African rand and edges on the Danish krone, which has a 0.47% market share.
To reach a top-five payment currency, the renminbi would have to achieve a 2% market share. The euro is the top payment currency with a 43% market share, followed by the U.S. dollar at 31%, SWIFT says,
On average, according to SWIFT, 4% of all payments value with China and Hong Kong was in RMB. Major users of the currency are Gulf countries, Singapore and the U.K. Canada and Germany are increasing their use of the currency, while renminbi use in major markets including the U.S., Japan and Australia remains low.
Free trading in the renminbi was allowed by Chinese regulators from 2009, and was met with cynicism from some market participants, who were skeptical about whether the Chinese government would truly allow unrestricted trading of the currency. Since then, renminbi has gained tracation as a mainstream currency. For more, see The renminbi rush, Global Custodian, Winter 2010.
SWIFT reported last month that the value of offshore payments in renminbi had grown 17.4 times since 2010.
(CG)