RMB tops regional trading currencies

The latest statistics from interbank messaging and transfer service SWIFT show that use of renminbi for trade payments to China and Hong Kong by Asia Pacific countries increased by over 300 per cent between April 2012 and April 2015.

During these past three years, the Chinese currency has moved from fifth position to become the currency most likely to be used in Asia Pacific to do business with Greater China, and in the process pushed the Australian dollar down to the fifth most used trade currency.

The change in the mix of trade currencies used by Australian businesses is typical of this trend, with payments volumes for RMB transaction up from three per cent in 2012 to 15 per cent by April 2015 -a large percentage rise, but from a small base.

The pace of RMB adoption will be further increased by the new appointments of four clearing centres (in South Korea, Malaysia, Thailand and Australia), noted Michael Moon, SWIFT's head of payments for Asia Pacific.

Overall, the RMB remains in its position as the fifth most active currency for global payments, leaping past the Canadian and Australian dollars, according to SWIFT's RMB Tracker.

These statistics were published at about the same time as an International Monetary Fund report was being circulated, asserting that the RMB was no longer undervalued in relation to the US dollar, in particular.

This claim was hotly disputed by the IMF's major backer, the US, reports the Financial Times, noting that the Americans and other advanced economies have long railed against what they see as a ploy by the Chinese government to give its export-oriented manufacturing sector an unfair competitive advantage through the maintenance of an artificially low RMB.