London overtakes Singapore as 2nd biggest offshore yuan clearing centre: SWIFT

Tuesday, 3 May 2016 00:49 - - {{hitsCtrl.values.hits}}

HONG KONG (Reuters): London has overtaken Singapore as the second-largest offshore yuan clearing centre in terms of payments processing volumes, just behind Hong Kong, the global transaction services organisation SWIFT said on Thursday.

Singapore overtook London in February 2014, but the trend started to reverse in January this year. In March, the value of yuan payments in London was 21% more than two years ago, SWIFT said.

Hong Kong still processes 72.5% of all yuan payments, and the market shares of London and Singapore are 6.3% and 4.6%, respectively.

SWIFT data also showed that 40% of all payments made between the United Kingdom and China and Hong Kong are exchanged in the yuan, 24% in Hong Kong dollars and 12% in sterling.

Since China Construction Bank London branch was appointed as the yuan clearing bank in the United Kingdom in June 2014, there has been a steady growth of yuan payments between the United Kingdom and China and Hong Kong.

“The UK’s rise to become the largest offshore yuan hub outside Hong Kong reflects the importance that European companies are placing on their commercial relationships in China,” Eddie Norton, HSBC’s regional head of payments and cash management of Europe said.

“As other regional cities such as Frankfurt and Paris strive to increase their yuan business, the outlook for European trade and investment flows with China looks increasingly bright,” Norton said.

The yuan remained the fifth most-used currency for global payments by value in March with a market share of 1.88%, slightly higher than 1.74% a month earlier, according to SWIFT.

Overall, yuan payments value in March increased by 18.46% from a month earlier.