Standard Chartered has said that the Standard Chartered Renminbi Globalisation Index, or the RGI, added Taiwan to the index.
Taiwan’s inclusion came in the wake of its growing offshore Renminbi businesses, driven by a year-to-date 420% surge in Renminbi-denominated cross-border payments and a consistently fast-paced accumulation of offshore Renminbi deposits.
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According to the bank, policy support from Beijing was another key consideration for the inclusion of Taiwan, translating into ample room for further growth in its offshore Renminbi businesses, such as Formosa bonds and FX.
Bolstered by Taiwan’s inclusion coupled with strong market momentum in other offshore centres, the RGI hit 1,112 in July, up 65% year-on-year and 5.1% month-on-month, the British bank said in a statement.
"We expect China’s capital account to be basically open by 2020. By 2020, we expect the share of Renminbi invoicing to double to 28%, from the current estimate of 14%, of China’s total trade; within that, about 6% of China’s commodity imports are likely to be invoiced in Renminbi.
"By the end of 2020, offshore Renminbi bond market is expected to reach CNY3 trillion while offshore Renminbi loans extended by Hong Kong banks could rise to HK$2.3 trillion, or 20% of total Hong Kong bank loans. The offshore Renminbi market is poised to converge further with the onshore market, and we expect the Renminbi exchange rate to be basically free-floating by 2020," the statement added.
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By GlobalDataStandard Chartered launched the RGI in November 2012. The Index covers the top four markets in offshore RMB business: Hong Kong, London, Singapore and Taiwan.
It measures business growth in four key areas: deposits, Dim Sum bonds and Certificate of Deposits, trade settlement and other international payments (unit of international commerce) and foreign exchange.
