City banks find plenty of takers for yuan accounts

Tourists, businessmen and overseas Chinese nationals were among the first non-residents to open yuan deposit accounts with Hong Kong banks this week.

Starting from Wednesday, in the latest move to support the city's bid to become an offshore centre for the yuan, the Hong Kong Monetary Authority (HKMA) said local banks could open yuan accounts for non-residents, who were also free to buy unlimited amounts of the currency.

Bankers said they expected the service to eventually become popular among long-term investors interested in taking an exposure to yuan-denominated products, who could now use Hong Kong as a base for their investments.

'We have so far seen customers from a mixture of backgrounds opening yuan accounts,' said Nixon Chan, head of retail banking and wealth management at Hang Seng Bank. 'Tourists from several different countries, overseas Chinese visiting Hong Kong, and some businessmen who have operations or trade relations here were among the first non-residents to open accounts.' Until this week, only Hong Kong identity card holders could open yuan accounts in the city.

But the HKMA, the city's de facto central bank, announced that non-residents could also open yuan accounts from August 1, in a bid to attract overseas investors to trade yuan products here.

The three note-issuing banks - HSBC, Standard Chartered Bank, and Bank of China (Hong Kong) - as well as Hang Seng Bank and some private banks rushed to offer incentives, mostly high interest rates, to compete for non-resident business.