According to the latest report from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), Renminbi’s market share in international transaction market rose to 2.79% in August, beating the Japanese Yen and becoming the fourth most used currency after the US dollar, the euro and the British pound. Dr. Ba Qing, Economist at the Economics and Strategic Planning Department, BOC(HK),  believes the trend would continue and the RMB can sustain its ranking in the long run.

Along with the speeding up in the internationalization process, RMB has been expanding the market share significantly since last year. The currency entered the first 10 most commonly used currencies in international transactions at the beginning of last year, with a 1.39% market share and ranking at number 7. At the end of the year, market share has already grown to 2.17%, superseding the Canadian dollar and the Australian dollar, earning its number five ranking in the chart.

Year to date in 2015, market share of RMB rose 0.73 percentage points and has attained an average market share 32% higher than last year. Ba believes RMB will continue to bypass the yen on popularity, because

• Market share of yen has remained largely steady. According to SWIFT, yen’s market share has more or less stayed at around 2.65% since last year. A little increase is seen this year with market share at 2.79%, but it is largely maintained between a 2.7% to 2.8% interval. On the other hand, RMB is still fast-developing in the regional transaction market, especially after new offshore clearance centers are being set up in Taiwan, Singapore, South Korea, Australia and Malaysia
• Reforms by the Peoples’ Bank of China on the currency would enhance its internationalization process and make it more popular in international trades
• The Chinese government has just released the China International Payments System (CIPs), and more policies and improvement in financial infrastructure and government coordination will be done to facilitate RMB’s internationalization. BM