HK loosens yuan conversion limits
Source: Bloomberg News |
July 26, 2012, Thursday
|
Print Edition
Print Edition
HONG Kong allowed non-residents to purchase an unlimited amount of yuan, seeking to defend its position as the global hub for international trade and finance in the currency.
While conversion at the offshore rate will start on August 1, buyers will need to seek permission to send the currency into the Chinese mainland, Hong Kong Monetary Authority Deputy Chief Executive Eddie Yue said yesterday.
The 20,000 yuan (US$3,130) daily conversion quota on the city's permanent residents at the onshore rate will be kept unchanged and a maximum of 80,000 yuan can be sent into the mainland every day, he said.
Hong Kong's biggest banks have been lobbying the central government to relax curbs on the city's yuan business as competition from London and Singapore intensifies. The halt in the yuan's appreciation against the US dollar this year has dampened appetite among residents for assets denominated in the Chinese currency, with the city's yuan deposits falling 35 billion yuan in the first five months to 554 billion yuan.
"This will raise Hong Kong's edge in the competition with other financial centers," Ngan Kim-man, head of the yuan business strategy and planning department of Hang Seng Bank Ltd, said yesterday. "If there are further relaxations, Hong Kong can embrace these new opportunities like other financial centers."
The People's Bank of China has ruled out the possibility of raising yuan conversion quotas for Hong Kong residents.
While Hong Kong was selected as the nation's major offshore yuan trading hub under the 12th five-year plan, its status is being challenged.
United Kingdom Chancellor of the Exchequer George Osborne in January called on London to expand its yuan trading. The British capital had 109 billion yuan of customer and interbank deposits, according to an April 18 report by research firm Bourse Consult.
Singapore's stock exchange plans to start listing securities denominated in the Chinese currency, according to a statement on July 6.
While conversion at the offshore rate will start on August 1, buyers will need to seek permission to send the currency into the Chinese mainland, Hong Kong Monetary Authority Deputy Chief Executive Eddie Yue said yesterday.
The 20,000 yuan (US$3,130) daily conversion quota on the city's permanent residents at the onshore rate will be kept unchanged and a maximum of 80,000 yuan can be sent into the mainland every day, he said.
Hong Kong's biggest banks have been lobbying the central government to relax curbs on the city's yuan business as competition from London and Singapore intensifies. The halt in the yuan's appreciation against the US dollar this year has dampened appetite among residents for assets denominated in the Chinese currency, with the city's yuan deposits falling 35 billion yuan in the first five months to 554 billion yuan.
"This will raise Hong Kong's edge in the competition with other financial centers," Ngan Kim-man, head of the yuan business strategy and planning department of Hang Seng Bank Ltd, said yesterday. "If there are further relaxations, Hong Kong can embrace these new opportunities like other financial centers."
The People's Bank of China has ruled out the possibility of raising yuan conversion quotas for Hong Kong residents.
While Hong Kong was selected as the nation's major offshore yuan trading hub under the 12th five-year plan, its status is being challenged.
United Kingdom Chancellor of the Exchequer George Osborne in January called on London to expand its yuan trading. The British capital had 109 billion yuan of customer and interbank deposits, according to an April 18 report by research firm Bourse Consult.
Singapore's stock exchange plans to start listing securities denominated in the Chinese currency, according to a statement on July 6.
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