Its latest report shows payments across most currencies decreased during this period, as trade and financial transactions fell, but the drop in RMB, particularly in October, was much more pronounced. RMB payments fell 31% that month, compared to the average of 7% across all currencies.
| RMB payments back to levels seen last June |
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| Source: SWIFT |
The RMB has now dropped two places to become the 17th most widely used payment currency, according to SWIFT data. In October 2010, RMB was ranked 35th by total value of payments and climbed to a peak of 15th in September.
| RMB is now ranked 17th world payments currency, |
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| Source: SWIFT |
Since October 2010, when SWIFT began aggregating payments data from the 9,700 financial institutions and corporations that use its communications platform, RMB payments steadily grew each month, reaching a peak in August and have since fallen rapidly.
"Whilst this is certainly an interesting development it is perhaps too early to decide whether this is an emerging trend or a temporary hiccup" said Wim Raymaekers, head of Banking Markets at SWIFT.
He notes that many businesses in China are closed for business the first week in October which may have contributed to the lower payments but the fall is nevertheless significant as SWIFT payments closely mirror economic cycles and trends.
In any case, RMB payments represent just 0.31% of total payments value, a low figure for a country that now accounts for more than 10% of global GDP and 9.6% of world trade.
Although the number of financial institution that had RMB-denominated financial transactions increased marginally in October to 1,025, up from 1,001 the previous month, this still represents only 30% of the 3,200-plus companies that do business with China across currencies.
Some analysts have forecast the RMB to enter the top-three most-circulated currencies by 2015, but further falls in payments in coming months may cause analysts to reassess their previous predictions regarding the pace of Renminbi internationalisation.