London overtakes Singapore as second largest offshore RMB clearing centre

The value of RMB payments in London rose 21% between March 2014 and March 2016, SWIFT said.   

There has been a steady growth in RMB payments between the UK and China and Hong Kong since June 2014 when China Construction Bank opened a branch in London, Stephen Gilderdale, SWIFT's UK, Ireland and Nordic managing director said.

"Offshore RMB clearing centres are driving greater use of the currency in global trade, and countries such as the United Kingdom, are reaping the benefits," Gilderdale said.

Forty per cent of these payments are made in RMB, 24% in Hong Kong dollars and 12% in sterling, the SWIFT data said.

The volumes in both London and Singapore are still small, however, at 6.3% and 4.6% of all RMB payments respectively, compared to Hong Kong which processes 72.5%.

The RMB was the fifth most used currency by value for global payments in March, with a market share of 1.88%, and the overall value of RMB payments increased by 18.46% in March from the previous month, SWIFT said. 

Last year, the People's Bank of China (PBOC) agreed a deal with the Bank of England which the banks said would see London become a hub for the dealing of Chinese currency.

A statement by the UK HM Treasury said that the agreement on clearing and settlement arrangements is the first of its kind for the RMB outside Asia and "further strengthens London’s position as the Western centre of RMB trading."