HONG KONG, July 29 South Korea's yuan payments
value in June rose more than six-fold from a year earlier,
taking it to eighth position in the world for yuan payments
excluding China and Hong Kong, global transaction services
organisation SWIFT said on Tuesday.
For the month, 68.9 percent of all direct payments between
South Korea and China and Hong Kong were in Renminbi, up from
32.8 percent from the same period last year, SWIFT said.
China is South Korea's most important trade partner,
receiving nearly a third of the latter's exports, but South
Korean companies have historically been underweight in the use
of the Chinese currency.
That situation is set to change as a number of steps have
been taken recently to boost the use of yuan currency between
the two countries.
China's central bank assigned Bank of Communications
, the country's fifth-biggest lender, as the
yuan clearing bank in South Korea earlier this month.
The world's second-largest economy also agreed to award an
80 billion yuan ($12.88 billion) licence for South Korea to
invest in its capital markets and help launch direct trading of
the yuan-won pair.
"Korean companies are increasingly attuned to RMB
developments as part of their global trade and liquidity
strategies and they're capitalising on the opportunities the
currency provides," said Martin Tricaud, CEO for HSBC Korea.
Though a latecomer to participate in the offshore yuan
business, the country's yuan pool has increased sharply in the
past year thanks to the attractive yields the currency provides.
Yuan deposits at banks in South Korea inched up by a net
$640 million in June to a record high of $11.97 billion, the
12th straight month for yuan deposits to reach a record high,
according to data from the Bank of Korea.
That makes competition to become the next biggest offshore
yuan hub after Hong Kong fiercer as Beijing accelerates the pace
of yuan activities in more countries and allows more foreign
investors to enter its domestic market.
Singapore still led renminbi payments in June with a market
share of 28.4 percent, followed by the UK at 22.5 percent, and
the United States at 10.8 percent, SWIFT said.
In June, the yuan reinforced its position as the seventh
most active currency for global payments and accounted for 1.55
percent of payments worldwide.
HSBC expects the yuan to be one of the top three global
trade currencies by 2015 and to be fully convertible within 5
(Reporting by Michelle Chen; Editing by Jacqueline Wong)