While Hong Kong is still by far the largest centre for offshore renminbi payments, Europe has quickly adopted the currency. It now represents 47% of global RMB payments outside of Hong Kong and China. Wim Raymaekers, head of banking markets at Swift, says it could be that the eurozone debt crisis has given an incentive, or at least an increased inclination, for European-based financial institutions to adopt the RMB.
“The City of London is actively positioning itself as a next major offshore RMB centre, but the support from Europe for the RMB is broader than that,” he says.
Europe uses the renminbi for 6.7% of all its payments with China and Hong Kong. That is a lower adoption rate than in Asia-Pacific, where 7.2% of all payments are in RMB, but the total value of European payments is larger.
Africa and the Middle East show strong adoption, mainly driven by Qatar, the UAE and, to some extent, South Africa, but the overall value is small. In the Americas, RMB adoption has been slower. There are some flows with the US and relatively good adoption by Canada but almost no RMB activity with Latin America.
| After a slow start, Europe is quickly adopting the RMB |
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| Source: Swift |
Excluding China and Hong Kong, Europe’s share in RMB payments increased from 36% in the first quarter of 2011 to 47% in the first quarter 2012, whereas Asia-Pacific’s share declined from 59% to 41%.
| Europe overtakes Asia-Pacific in RMB payments value contribution |
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| Source: Swift |