Hong Kong Monetary Authority

Zhou raises hopes for more yuan services

PUBLISHED : Wednesday, 07 June, 2006, 12:00am
UPDATED : Wednesday, 07 June, 2006, 12:00am

Hong Kong's lenders may be allowed to offer more banking services denominated in yuan this year, according to People's Bank of China governor Zhou Xiaochuan.


Banks in Hong Kong have been offering four types of personal yuan business - deposit, exchange, remittance and credit card - since February 2004, but local lenders hope the scope can be expanded to include yuan lending.


Mr Zhou told a delegation of Hong Kong Institute of Bankers in Beijing that the development of yuan business should be step by step.


Asked whether there would be any chance for yuan business to further expand this year, he said: 'I think there's a hope.'


In his budget speech last year, Financial Secretary Henry Tang Ying-yen said yuan business in Hong Kong could be expanded in such ways as setting up a bond sale mechanism, building a system to handle cross-border trade transactions and providing yuan loans to enterprises.


Stanley Wong Yuen-fai, director and deputy general manager at ICBC (Asia), said even if Hong Kong lenders were allowed to expand yuan business to trade finance, the volume might be small initially.


'Whether the transactions will be settled by yuan have to be agreed by both buyer and seller,' he said.


Joseph Yam Chi-kwong, chief executive of the Hong Kong Monetary Authority, said the People's Bank of China and the authority had already set up a task force to co-operate on financial infrastructure in both markets.


He also said the authority had developed a multi-currency clearing system.


Mr Yam said the daily turnover of Hong Kong dollar real-time gross settlement was about $400 billion to $500 billion on average, and hit a record $1.23 trillion when Bank of China listed last Thursday.