The use of the Chinese currency has been growing in the payments
market for a while now. But it still only accounts for 0.34% world
payments currencies.
Now SWIFT has drawn attention to the use of
the RMB in trade finance, where the RMB has a market share of 4% in
the issuance of letters of credit.
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In terms of number of transactions, letters of
credit in RMB ranks fifth, after the US dollar (80.6%), euro
(11.3%), Japanese yen (32%) and the Arab dirham (0.7%).
This market share puts the RMB in the top
three biggest currencies used for the issuances of letters of
credit by value as of April 2012. The US dollar still, by far,
dominates the letters of credit currency market with 84.4%,
followed by the euro with a 7% market share in letters of credit.
In contrast, the Japanese yen has a global market share in letters
of credit transaction value of 1.9%.
RMB’s use in letters of credit is
predominantly used in Asia Pacific, which accounts for over half of
all such payment assurances used by banks in China and Hong Kong.
In the China to Singapore trade corridor, the RMB accounts for a
fifth of all letters of credit transaction values.
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