Europe is now the source of 47% of all payments denominated in renminbi by value, excluding Hong Kong and China, according to SWIFT, a financial messaging operator.
Hong Kong remains the largest source of renminbi payments, accounting for 80% outside of China, but Europe is on track to surpass the rest of Asia Pacific by the end of the year, if the current trend holds.
SWIFT declines to provide data in terms of total values, preferring to speak only in percentages.
It should also be noted that the renminbi receives a lot of hype in the media, particularly in Hong Kong, but the renminbi only accounts for only 0.35% of total global payments. However, CFOs should pay attention to its growth. The renminbi may only be the 16th most used global currency, moving up one spot in March this year.
Europe now uses the renminbi for 6.7% of all its payments with China and Hong Kong, up from 2.5% the same time last year, in any currency. Only 7.2% of payments made in Asia Pacific (excluding Hong Kong and China) are in renminbi, up from 4.3% at the same time last year
In the ramp up of renminbi trading in the UK, London makes up 25.3% of global renminbi payments, while Singapore, a close rival, makes up 33%, excluding Hong Kong and China.
“Europe is actually contributing more to renminbi payments than Asia Pacific thanks to its bigger absolute payments value,” SWIFT said in a statement. “Excluding China and Hong Kong, Europe’s share in renminbi payments increased from 36% in the first quarter of 2011 to 47% in the first quarter of 2012, whereas Asia-Pacific’s share declined from 59% to 41%.”