Renminbi’s share as international payment currency drops for second month in September: SWIFT

The share of the Chinese renminbi as an international payment currency declined for a second straight month in September, sliding down the global list to rank behind the Canadian dollar, according to global financial messaging service provider SWIFT on Tuesday.

The Chinese government’s capital control had reduced the outflow of the renminbi (RMB), with key offshore centres, such as Hong Kong, recording a “marked decline” in RMB deposits, it said.

International usage of the RMB accounted for 1.85 per cent of payments by value in September, ranking No. 6 among major currencies worldwide, SWIFT (the Society for Worldwide Interbank Financial Telecommunication), the network that global financial institutions use to send payment instructions each day, said in a report.

The ratio has dropped for two consecutive months, down from two per cent in July to 1.94 per cent in August, and then falling further in September.

The Chinese currency ranked No. 5 in both July and August as an international payment currency.

In September, the US dollar was the most active currency globally, used for 39.79 per cent of payments in value, followed by the euro, the British pound, the Japanese yen, and the Canadian dollar.

SWIFT analysts said a multitude of factors had led to the drop, including Beijing’s regulatory measures to stem capital outflows and a fall in usage of RMB-denominated letters of credit (LCs).