Stores take mainland currency
LOCAL department stores have announced they will accept mainland currency in a move which some bankers believe could upset the money supply.
And concerns have been raised that shoppers could be confused by stores which show price-tags in local and Chinese currencies.
Major retail chain Yue Hwa Chinese Products Emporium has announced it will allow payment in yuan, while Chinese Arts and Crafts (Hongkong) will start accepting yuan from Monday.
A spokeswoman for Chinese Arts and Crafts said training had been given to sales staff on how to translate local prices into yuan.
Deputy manager of Yue Hwa, Mr Yau Tak, expected more businesses after the change.
''It is convenient for mainland customers. They do not need to go to the bank to exchange.
''Individual stores will make their own decision, but I expect more stores will consider accepting yuan in view of the big number of mainland tourists,'' said Mr Yau.
Dragon Seed Company chief manager Mr Percy Wong said it would look at the market but saw no urgent need to accept the currency.
''Our mainland customers usually pay by credit cards or US currency. But we shall look at the currency's popularity and may accept it in the future.'' Retail Management Association chairman Mr Roger Thomas said most retailers were accepting foreign currencies and they might meet later to discuss the need to accept yuan.
But Standard Chartered Bank regional treasurer Mr Goh Gen-cheung said yesterday if the circulation of the yuan got bigger, it might be confusing, especially to tourists.
He said the Government should monitor the situation as the circulation of yuan would also affect the money supply and money growth.
''As more and more renminbi [yuan] circulates in Hongkong, it adds to the overall money supply and thus would fuel inflation,'' Mr Goh said.
''However, the amount will be relatively small when compared with the $6 billion worth of Hongkong dollars in circulation.'' Standard Chartered has no plan to provide yuan accounts for their customers because of the technical problems involved.
Mr Goh said the black market in China would grow as the yuan circulated in Hongkong needed to be converted into hard currency such as Hongkong dollars.
Senior manager of the Office of the Exchange Fund, Mr Chan Chi-chiu, however said the circulation of the yuan would not create problems.
''There has been no control over the circulation of foreign currencies in Hongkong and renminbi is only one of them. There is no need for the Government to monitor or control it,'' Mr Chan said.
Beijing relaxed its ban on people taking currency out of the country and allowed travellers to take up to 6,000 yuan (HK$8,082) in and out of the country on March 1.
