Renminbi's payments use jumps in December The popularity of China's renminbi surged last December, consolidating the currency's meteoric rise past 22 others over the past three years to rank as the eighth-most used money for payments in the world. Several factors - including renminbi appreciation, China's ballooning trade volumes and the Chinese currency's increasing attractiveness as a conduit for portfolio investments - contributed to an upsurge in usage that SWIFT, the payments company, put at 15 per cent between November and December last year. "The fact that between November and December 2013 other currencies grew seven per cent whilst the RMB grew 15 per cent... might suggest that use of the Chinese currency is becoming business as usual for the world's financial institutions and corporates," said Franck de Praetere, head of payments and trade markets, Asia Pacific, at SWIFT. The renminbi's two per cent appreciation against the US dollar in 2013 has helped reinforce the currency's attractiveness as a store of value, boosting its liquidity in Hong Kong and making it more readily available to settle trade and retail transactions from around the world. Some 74 per cent of renminbi payments are concentrated in Hong Kong, according to SWIFT, but the UK, Singapore and Taiwan are also seeing strong growth in renminbi settlement. However, even though renminbi usage for payments around the world is surging, in absolute terms it remains a distant laggard behind the US dollar and the euro, which accounted for 39.5 per cent and 33.2 per cent of payment transactions in December, compared to just 1.1 per cent for the renminbi. The Chinese currency is, however, gaining fast on the Swiss franc - the seventh most used currency - which accounted for 1.3 per cent of payments in December. John Laurens, HSBC's regional head of payments and cash management in Asia-Pacific, called upon company treasurers to keep attuned to renminbi developments to benefit from opportunities that the currency provides. The main advantage of trading directly in renminbi, rather than through a settlement currency such as the US dollar, was that it cut down uncertainties and the costs of doing business, bankers said. "The RMB continues to solidify its position as a global currency and we expect that in the next five years it will become convertible," Mr Laurens said. The latest SWIFT figures come after an announcement late last year that showed the renminbi was used in 8.66 per cent of trade finance transactions late last year, second only to the US dollar. Bankers" cautioned, however, that this number was probably inflated by shadow financiers making use of low Hong Kong interest rates to borrow money which is then smuggled into the mainland to be lent onward at steep mark-ups in the shadow lending market.