RMB Breaks into the Top Four as a World Payment Currency
On October 6th, according to the latest data released by SWIFT, RMB became the fourth most-used world payment currency in August, overtaking the Japanese Yen for the first time. RMB hit a record with 2.79% of market shares of the global payment system, higher than the historical record of 2.34% in July. The report shows that RMB was used in more than 100 countries and regions in August, of which over 90 percent of flows were concentrated in 10 countries. Singapore processed 24.4% of the total, followed by the United Kingdom with 21.6%. At present, RMB payment is applied by more than 1,700 global financial institutions, up by 14% compared with the same period of last year.
The rising currency status signifies the accelerated internationalization progress of RMB. By the end of May 2015, the People’s Bank of China had signed the bilateral currency swap agreement with the central bank or the currency administration of 32 countries and regions. The total value of these agreements reached RMB 310 million. RMB clearing arrangement is set up in 15 countries and regions. The International Monetary Institute of Renmin University of China forecasted that RMB would jump to the 3rd world currency, just behind US dollar and EURO before 2020 in its “2014 RMB Internationalization Report”.