New | One in three payments between China and South Africa settled in yuan

Nearly one in three payments between Greater China and South Africa were settled in the Chinese yuan last month compared with 10.8 per cent a year earlier, underscoring its rising acceptance in the region as Beijing works on getting the renmimbi accepted as a global reserve currency.

The number of payments in yuan between China/Hong Kong and Africa’s second biggest economy soared 33 per cent over the last 12 months compared with the same period a year ago, according to monthly RMB tracker released by Swift on Wednesday. The renminbi usage in trade between the two regions had almost tripled over the past two years, the Swift data showed.

“Much of this growth has to do with the strengthened bi-lateral trade and investments between South Africa and China, which were renewed at the end of 2014 to include trade co-operation and sustainable investment opportunities between the two countries” said Hugo Smit, Head of Africa South, Swift. “Renminbi usage in South Africa should continue to grow at a good rate.”

The US dollar still topped the yuan as South Africa’s most active-currency for payments to China and Hong Kong, accounting for 70 per cent of payments over the last 12 moths, according to Swift data.

South Africa is the first African country to host the first yuan clearing house on the continent in early July, three months after central banks in the two nations inked a three-year bilateral agreement for the swap of local currencies of up to US$4.8 billion(HK$37.20 billion).

China is South Africa’s biggest trade partner with value of exports and imports at US$61.6 billion last year.