The Society for Worldwide Interbank Financial Telecommunication (Swift) reported that renminbi-denominated payments surged 33% in February compared to the previous month, suggesting a market rebound post-lunar New Year period in January.
This propelled the renminbi back to the 17th position in the list of world currencies, up from the20th position in January. Overall, the share of Chinese currency – also known as yuan – in world payments increased minimally from 0.25% in January to 0.33% last month.
On the other hand, overall world payments declined by 0.3% due to large drops in euro- and British pound-denominated payments.
Among the five largest trading partners of China in Asia, Swift noted that Australia has the lowest volume of renminbi payments transacted in February, reaching a mere 1.9%, which is a drop from 3.1% in January 2012.
The country also has one of the lowest renminbi adoptions compared to other Asian countries. This is well below the average 6.6% of renminbi payments transacted within Asia, excluding China and Hong Kong.
Swift highlights two reasons to build a renminbi relationship with Australia.
“With nearly 20%, China is Australia’s biggest trading partner and payment flows between Australia, and China and Hong Kong are among the biggest in Asia,” said Swift in the research note released on March21. “This should give ample opportunity for China and Australia to grow their renminbi flows.”
Moreover, Taiwan, which was non-existent a year ago, increased its Chinese currency-denominated transactions over the recent months to reach 11.4%.