Global Use of the Renminbi is to Fall

Use of the renminbi in global payments fell in March.

The Chinese currency broke into the top5 most used payments currencies last year, overtaking the Canadian and Australian dollars.

But in February, renminbi use dropped to 1.8% of global payments from 2.2%, nudging it back down to 7th in the rankings.

Issuance of offshore renminbi bonds is expected to record the first annual contraction since the market opened in 2007, according some analysts.

China’s HSBC found that only 27% of those not currently using the renminbi were planning to start using it, down from 32% in 2014, even Chinese companies are looking elsewhere choosing to raise new debt offshore.

Beijing has taken a number of steps over the past year to encourage international use of its currency, notably with the launch of the Shanghai-Hong Kong Stock Connect, a cross-border equity trading link denominated in renminbi.

Hong Kong still dominates renminbi business outside mainland China, however, its share has been falling as renminbi use in other centers has grown.