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Jeanny Yu

Yuan payments worldwide soared to a record high last month, in the latest sign that the currency is fast spreading out of China as other global financial hubs catch up with Hong Kong in yuan trade.
Payments between offshore yuan hubs, excluding Hong Kong, increased 837 per cent year on year to account for 3.25 per cent of the global yuan payment volume last month, data shows.
The market share was only 2.64 per cent a year earlier and 1.66 per cent in September 2012.
The data shows that the development of the offshore yuan market is moving from being highly Hong Kong-centric - driven by successive policy pushes - to one increasingly fuelled by the business needs of foreign yuan users.
Singapore, Luxembourg and Britain have seen the biggest growth in yuan payments this year, by 574 per cent in Singapore, 517 per cent in Luxembourg, and 236 per cent Britain, according to Swift.
The yuan's success in expanding its geographical reach has largely been a result of China's sizeable trades with its trading partners.
However, Swift's latest report shows that it is also being increasingly used as an investment currency in securities trades and foreign exchange transactions.
In the yuan securities business, which involves settlement needs of investors when buying dim sum bonds, the "true" offshore yuan hubs now account for 28.27 per cent of the overall market volume, compared with 27.94 per cent a year earlier and 16 per cent in 2012.
A deeper liquidity pool and more product offerings in these cities are encouraging more and more companies to finance their yuan needs in the offshore market to support trade and finance activities.
"As China becomes ever more important to international businesses, the internationalisation of the [yuan] is creating opportunities in trade, investment, cash management and funding," said Vina Cheung, HSBC's global head of yuan internationalisation, payments and cash management.
"HSBC forecasts that a third of China's trade will be settled in [yuan] by 2015 and that the currency will be fully convertible by 2017."


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Yuan

Yuan hits its stride as offshore hubs catch up

Yuan payments worldwide have soared to a record high. Photo: AFP

Business

Money

Markets & Investing

September payments, excluding Hong Kong, surged 837pc year on year


Yuan payments worldwide soared to a record high last month, in the latest sign that the currency is fast spreading out of China as other global financial hubs catch up with Hong Kong in yuan trade.
