Singapore overtakes London as top RMB offshore clearing centre

But it still can't beat Hong Kong.

SWIFT data shows that Singapore’s RMB payments value increased by 375% between March 2013 and March 2014, making Singapore number one in terms of RMB world payments value, excluding China and Hong Kong. 

Singapore’s weight represents 6.8% of the overall RMB payments value, second behind Hong Kong, which still leads with 72.4%. London overtook Singapore in June 2012, but, since February 2014, it has slipped behind Singapore despite a good growth rate of 203% year-over-year from 2013. London now carries the weight of 5.9%.

Claus Kwon, Head of Securities Markets, Asia Pacific, at SWIFT says: “Ever since last year’s nomination of ICBC as a clearing bank in Singapore, we have been expecting the Singapore RMB payments flows to accelerate, especially as Chinese companies use it as a hub to reach ASEAN countries. We are now anticipating securities traffic to ramp up as well. In April, the Monetary Authority of Singapore indicated in a speech that they are now looking to expand from a strong base in trade financing to developing a broader range of RMB investment offerings, particularly in capital markets and asset management.”

Mr. Kwon adds: “The United Kingdom and Singapore appear to be taking a collaborative approach to serve RMB internationalisation. For example, this past February, the UK and Singapore governments announced the new UK-Singapore Financial Dialogue, a private sector forum designed to boost the development of the offshore Renminbi market.”

In March 2014, the RMB strengthened its position as the seventh-ranked global payments currency with a new record-high activity share of 1.62% (from 1.42% in February 2014).

The RMB is gaining on the Canadian Dollar (CAD) at 1.83% and the Australian Dollar (AUD) at 1.84%. At a global level, RMB payments increased in value by 29.0% in March 2014 compared to February 2014, when all currencies increased by 13.4% during that same period.