The use of China's currency, the renminbi, is increasing for the settlement of international trade deals, with the latest data showing 57 countries now use it to make more than 10 percent of their direct payments to China.
The trend has been hailed as showing a significant boost in confidence for the renminbi, especially because it follows closely on from the currency joining the International Monetary Fund's basket of Special Drawing Rights (SDR) currencies, which happened on Oct 1 and which paves the way for it to become an international reserve currency.
The data released on Thursday by the Society for Worldwide Interbank Financial Telecommunication (SWIFT) in Brussels, also showed that 101 countries use the renminbi for some of their payments with China globally, making an average of 12.9 percent of their overall transactions with China in renminbi, an increase of 2 percent since October 2014.
"Over the last two years, we have witnessed a continued increase in RMB usage for direct payments," said Astrid Thorsen, head of Business Intelligence Solutions at SWIFT.
Helena Huang, China economist at ICBC Standard Bank in London, said the data shows the scope and breadth of RMB's usage as a trade currency, having spread from China's core trade partners to smaller partners, particularly those in emerging markets.
"This could be an early signal that emerging markets are increasingly adopting RMB as a trade currency in preference to the dollar," said Huang.
Vina Cheung, HSBC's global head of RMB Internationalization, Global Liquidity and Cash Management, Asia-Pacific, said the SDR inclusion this month confirms the RMB's emergence as a global currency,"which will be another catalyst for its growing use in trade and investment with China."
In addition to its growing use as a trade currency, it is also being increasingly used as an investment currency - for foreign exchange trading, bond issuance and other financial market activities.
Huang said London enjoys a natural advantage as a leading of shore RMB hub, and, to maintain this advantage, it is important that the UK government helps London continue to offer world-class financial services, regardless of Brexit negotiations.
London's renminbi clearing bank, CCB London, recently marked the significant milestone of clearing 10 trillion yuan ($1.5 trillion) of transactions between June 2014- when it was appointed by PBOC to be London's official renminbi clearing bank- and August 2016.
