DBS RMB index edged up in first quarter

An RMB index launched by DBS increased to 55.1 in the first quarter from 54.9 in the previous quarter, representing a marginal increase in the usage and acceptance of offshore RMB among local corporations, the bank said in a research note on Friday.

Large corporations were found to be keener to use RMB financing via RMB loans and CNH bonds, which are believed to be the driving force of offshore RMB development in Hong Kong in 2013, according to the report.

In the first quarter of 2013, the breadth of RMB internationalization has increased with the development of offshore RMB markets in China's Taiwan and Singapore. Locally, RMB usage has only increased marginally.

HK dollar and US dollar remain the preferred currencies for trade settlements, financing, and day-to-day business transactions.

According to the DBS survey, only 2 percent of local companies that used payment and receivable/trade services preferred to use RMB for these purposes, while 73 percent preferred HK dollar and 22 percent preferred US dollar.

Of the companies that used any RMB products, 40 percent were using foreign exchange spot and 28 percent were using savings/cheque accounts. The product spectrum is still limited to simple product types.