China’s renminbi (RMB) emerged as the second most used currency for documentary credit transactions, although it's still way behind the US dollar which has nearly 80% share, global transaction services.
SWIFT RMB Tracker revealed the RMB’s activity share for documentary credits increased in value to 9.43% in January 2015 from 7.32% in January 2013. This strengthens the RMB’s position as the second most used currency for this purpose.
“Letters of credit and documentary collections are widely used instruments to finance trade flows across Asia,” says said André Casterman, global head, corporate and supply chain markets at SWIFT.
“China’s position as one of the main exporting and importing countries in the world is supporting the increasing use of the Chinese currency. However, many of these RMB transactions are still mostly driven by China and Hong Kong, even though the RMB is nearly 10% of traditional trade finance flows globally in terms of value,” says Casterman.
In January 2015, China, Singapore and Hong Kong remain the top three countries using RMB as currency for documentary credits, exchanging nearly 95% of all RMB documentary credit transactions worldwide in value. They were followed by Macau and Taiwan with 0.88% and 0.86%, respectively.
The Chinese currency held its position as the fifth most used payments currency in the world with an activity share of 2.06% last month. Overall, RMB payments decreased in value by 10.22% in January, while the decrease for all payments currencies was at 5.7%.
