Standard Chartered RMB globalisation index posted a new high in December

Thanks to a rebound in CNH deposits in Hong Kong.

In a release, Standard Chartered announced the Standard Chartered Renminbi Globalisation Index, or the RGI, posted another new high of 748 in December, up 2.8% from November’s 728[1], in part due to a significant rebound in CNH deposits in Hong Kong.

For 2012, the RGI rose 50% despite waning global demand, fragile market sentiment, and the absence of Renminbi appreciation expectations. The index is expected to rise at least another 50% in 2013, on prospects of recovering confidence in China’s economy, CNY appreciation and growing invoicing in Renminbi.

The ratio of the relative sizes of the Hong Kong, Singapore and London offshore Renminbi markets is now 81:11:8. We remain optimistic about London’s Renminbi customer deposit outlook, thanks to its continued strong CNH usage for FX and trade. Singapore saw in December a rebound in Renminbi-denominated cross-border payments and higher CNH FX turnover. The rollout of Taiwan’s Renminbi business among its Domestic Banking units on 6 February could accelerate Taipei’s admission to the RGI.

Standard Chartered launched the RGI in November 2012. The Index covers the top three markets in offshore RMB business: Hong Kong, London, and Singapore. 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.