SWIFT’s RMB Tracker shows that the Renminbi is the fourth most active currency for payments between India and mainland China/Hong Kong by value while the US dollar continues to dominate the corridor
Recent SWIFT data shows that India’s use of RMB for payments in value with mainland China and Hong Kong is on the rise, but the country still shows one of the lowest RMB adoption rates among Asian countries/regions, ranked 38th worldwide.
In April 2016, 3.8% of all payments made between India and mainland China/Hong Kong were exchanged in RMB while this was only 0.2% back in April 2014. Since 2014, the Chinese currency moved from position number six to position four for payments by value overtaking the Hong Kong dollar and the British pound. The US dollar, however, continues to lead the corridor with a share of almost 80%, followed by the Indian rupee (7.2%) and the euro (6.3%).
“China has emerged over the last decade to become India’s largest trading partner,” says Michael Moon, Head of Payments, Asia-Pacific at SWIFT. “As a result, RMB adoption is slowly gaining traction for payments between India and China. Over time, and in line with the growing importance of this emerging trade corridor, we expect to see greater use of the RMB between these two countries. It is an exciting time for the Indian banking community. Not only are they helping to further internationalise the RMB, but are embracing new tools to support trade growth and financial sector globalisation.”
Earlier this year, SWIFT and nine Indian banks launched SWIFT India, a joint venture that provides domestic financial messaging service for Indian banks, global banks, securities houses and corporates. SWIFT India will support growth in automation, financial message standardisation, systems and processes for all financial market participants in India. These capabilities encompass all important infrastructure enablers that can support further development of cross-border payments for India.
In April 2016, the RMB fell to position six as global payments currency by value with a share of 1.82%. The Renminbi is now trailing the Canadian dollar with a share of 1.83%, showing a minor gap between the two currencies. Overall, RMB payments value decreased by 7.73% compared to March 2016, whilst in general all payments currencies decreased by 4.60%.