Our Renminbi Globalisation Index is up 0.3% in June

Standard Chartered today announced that the Standard Chartered Renminbi Globalisation Index (Bloomberg: SCGRRGI <index>), or the RGI, reached 1,888 in June, up 0.3% from the previous month and 75.8% year-on-year.

Growth was the slowest in 20 months, reflecting lingering effects of the Renminbi sell-off and China slowdown from first-quarter 2014. Dim Sum bonds were the only significant contributor to the index, while both trade and FX turnover detracted moderately and deposits stayed flat. This soft patch is expected to stay throughout the third quarter before picking up again in the fourth quarter at the earliest.

London remains the biggest centre for cross-border Renminbi payments outside of Hong Kong. The US is fast catching up with Singapore for second place – payments through the US more than doubled in the last four months, while those through Singapore grew 13% in the same period. Singapore is still the biggest centre for corporate payments, while payments through both London and the US predominantly comprise of institutional flows. South Korea is still a relatively small centre for cross-border Renminbi flows, accounting for less than one-tenth of the flows through London, but Renminbi deposits in South Korea rose to CNY74 billion at the end of June, comparable to deposits in Taiwan 12 months ago.

The seventh Offshore Renminbi Corporate Survey showed CNH activities are stabilising. Eighly-six percent of surveyed respondents said they were using some form of offshore Renminbi product, up from 74% in January. Existing onshore users of CNH loans grew 67% compared to 21% of offshore users. The survey showed 30% of surveyed companies are currently involved in CNH loans, up from 24% six months ago. Renminbi loans start to comprise a significant share of overall funding. This is likely a result of weakened one-way appreciation expectation for the currency and the initiation of various cross-border loan programmes.

One out of four respondents has either already established an entity in the Shanghai Free Trade Zone (FTZ), or are planning to do so in the next six months. Cross border sweeping has been the zone’s main attraction, whereby one-third of existing and potential FTZ users are already doing or planning to do it. Two-thirds of respondents with a presence in the FTZ are already also settling trades in Renminbi.

Download our report about the survey: Offshore RMB – a pragmatic view from onshore > PDF

Standard Chartered launched the RGI in November 2012. Prior to adding New York, the Index covered four markets in offshore RMB business: Hong Kong, London, Singapore and Taiwan. It measures business growth in four key areas: deposits (denoting store of wealth), Dim Sum bonds and Certificate of Deposits (as vehicles for capital raising), trade settlement and other international payments (unit of international commerce) and foreign exchange (unit of exchange). As the Renminbi further internationalises, there is capacity to include additional parameters and markets.

Standard Chartered Renminbi Globalisation Index

For further information, please contact:

Gabrial Kwan
Corporate Affairs, Hong Kong
+852 2820 3036
Gabriel.Kwan@sc.com

Joyce Li
Corporate Affairs, Hong Kong
+852 2820 3841
Joyce.Li@sc.com