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Treasury & Capital Markets
China’s renminbi payment bounces back in July
The renminbi bounced back to its position as the fifth most active currency for global payments by value in July with a share of 1.90%, a slight increase from 1.72% in June 2016.
Derrick Hong 25 Aug 2016
The renminbi bounced back to its position as the fifth most active currency for global payments by value in July with a share of 1.90%, a slight increase from 1.72% in June 2016.
Renminbi payments increased in the month as countries including South Africa boost usage of the currency over the last many months.
Swift’s RMB Tracker shows that the renminbi usage across South Africa has jumped 65% over the last 12 months and more than doubled in the last two years.
In addition, nearly 40% of renminbi payments by South African institutions have been offshore payments exchanged with countries other than mainland China and Hong Kong, compared to 16% in July 2015.
"South Africa has experienced a major shift in renminbi growth over the last two years, strengthening the country's trade relations with mainland China and Hong Kong," says Harry Newman, head of banking, Swift. "The establishment of an renminbi clearing centre in South Africa in July 2015, as well as Singapore's increased use of the renminbi for payments with South Africa, have been a catalyst for renminbi growth in the region."
China has been working closely with Africa in boosting the RMB internationalization in recent years. During the forum on China-Africa Cooperation, held in Johannesburg in December 2015,  China and representatives from 50 African countries agreed to actively implement a Memorandum of Understanding on the promotion of China-Africa Cooperation in the area of infrastructure (fields of railway, highway, regional aviation networks and industrialisation). They will give priority to encourage Chinese businesses and financial institutions to expand investment through various means, such as Public-Private Partnerships (PPP) projects. This MoU will increase the commercial exchanges between China and the African continent and should positively impact RMB volumes in the future.
On June 22, the CFETS (China Foreign Exchange Trading System) announced that the South African Rand will be tradable against the RMB in China's onshore FX market, in a step to reduce exchange cost. And on August 23, the CFETS also approved the African Development Fund and African Development Bank to participate in China’s interbank FX market. 
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