HONG KONG, April 28 (Reuters) - Singapore has surpassed London to rank second globally as a clearing center for the Chinese currency, after the world’s top bank was set up to clear payments in the city-state last year, global transaction services organisation SWIFT said on Monday.
Hong Kong is the busiest clearing centre for the yuan, also known as the renminbi.
The value of Singapore’s yuan payments in March rose 375 percent from a year earlier, taking up 6.8 percent of the overall renminbi payments. That compared with 72.8 percent for Hong Kong and 5.9 percent for London, SWIFT said.
London overtook Singapore in June 2012, but since February 2014 has slipped behind the city-state. That has been in spite of growing 203 percent in March from the previous year, SWIFT data showed.
“Ever since last year’s nomination of ICBC as a clearing bank in Singapore, we have been expecting the Singapore RMB payment flows to accelerate, especially as Chinese companies use it as a hub to reach ASEAN countries,” said Claus Kwon, SWIFT’s Asia Pacific head of securities markets.
“We are now anticipating securities traffic to ramp up as well,” Kwon added.
China named Industrial and Commercial Bank of China (ICBC) , the world’s biggest bank, as the clearing bank for offshore yuan business in Singapore last February.
The total clearing amount exceeded 10 trillion yuan ($1.60 trillion) as of April 8, and the peak daily clearing volume reached nearly 300 billion yuan, according to the bank’s data.
Competition among offshore yuan centers is intensifying as European cities strive to set up their own yuan clearing banks to facilitate trade transactions and investments.
Britain and Germany both signed agreements with China in March to set up a clearing service for renminbi trading, in the race to capture a share of the fast-growing Chinese foreign exchange market.
Yuan payments rose in value by 29 percent in March from a month earlier and gained one place to seventh position as a global payments currency with a market share of 1.62 percent, up from 1.42 percent in February, SWIFT said.
The yuan’s payments value lagged the Canadian dollar at 1.83 percent and the Australian dollar at 1.84 percent.
$1 = 6.2536 Chinese Yuan Reporting by Michelle Chen; Editing by Jacqueline Wong