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Yuani

The Chinese yuan, also known as the renminbi, is already convertible under the current account - the broadest measure of trade in goods and services. However, the capital account, which covers portfolio investment and borrowing, is still closely managed by Beijing because of worries about abrupt capital flows.

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  • Hong Kong-based insurer’s annual net profit came in at US$3.76 billion, or 32.68 US cents per share
  • The value of new business, an important measure of sales and future growth, rose 33 per cent to US$4.03 billion

Two years after the invasion of Ukraine isolated Russia from the Western financial system, major energy and mining companies have come to rely on the yuan for most of their foreign-currency needs

High-profile economist and former State Council researcher warns that potential US capital injections in China, following any Fed rate cuts, might be tumultuous for already-battered markets.

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Analysts say that while enhanced financial ties between the two countries could help internationalise China’s currency, Beijing tends to play it safe when upholding its neutrality regarding the war in Ukraine.

HSBC, Standard Chartered and Hang Seng Bank are rolling out more products tied to the Wealth Management Connect scheme amid a drive by Beijing to boost the Greater Bay Area’s financial markets.

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China’s latest act is to invite more foreign players to its US$232 trillion onshore repo market. As a precursor, Hong Kong will treat Chinese government bonds and policy bank bonds as eligible collateral in its yuan liquidity facility.

Hong Kong is set to continue capitalising on offshore yuan funding opportunities after ‘dim sum’ bonds and loans – offshore debt denominated in the yuan – grew exponentially in 2023, regulators say.

Policy sales have been boosted by the reopening of the mainland border, a weakening yuan and the interest rate gap between China and the United States, the Insurance Authority says.

People’s Bank of China (PBOC) is set to leave the rate on its one-year policy loans – the medium-term lending facility (MLF) – steady at 2.5 per cent on the first working day after the Lunar New Year holiday ends.

With the former president seemingly a lock for the Republican nomination, investors are preparing for a possible return to the days of the US-China trade war which steamrollered the yuan during his term in office

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China has the world’s largest foreign exchange reserves, but some have argued Beijing needs to reduce its size, while others believe having a sizeable holding remains important.

Russian central bank governor Elvira Nabiullina says the yuan’s share in Russia’s exports has increased from 0.4 to 34.5 per cent, replacing the US dollar and euro as its ‘primary’ currency for foreign economic activity.

The government is actively engaging with mainland Chinese regulators to speed up the approval process for companies listing in the city. Measures will also be rolled out to attract family offices and wealthy individuals.

China imported a record high 1,447 tonnes of gold for non-monetary use last year, with the middle class attempting to preserve their dwindling fortunes caused by the property market crisis and slumping stock market.

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The new policies relaxed cross-border payment rules between the 11 cities of the Greater Bay Area to make it easier for the residents of Hong Kong and Macau to buy homes in southern China.

Potential US rate cuts this year will redirect capital to Asia, boost the yuan and create demand for yuan products, Standard Chartered’s John Thang says. Hong Kong’s efforts to promote family offices and the investment migration scheme will act as catalysts.

China is continuing to encourage the international adoption of the yuan, but drastic measures seem unlikely as a ‘prudent, steady’ approach has been advised.

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China is set to meet its growth economic target of ‘around 5 per cent’ this year, but potential depreciation pressure on the yuan is set to limit Beijing’s options to respond to a potential slowdown next year.

Hong Kong sees yuan trading, talent development and green finance as three potential areas of cooperation to boost its ties with Vietnam and Laos, top treasury official Christopher Hui says in a blog post.

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China and the UAE want to expand cooperation through investments in the Pacific islands and Africa, said Hong Kong-based consul general Shaikh Saoud Ali al-Mualla, while also increasing use of the yuan.

Fears about their assets being vulnerable, following the US seizure of Russia’s foreign exchange reserves last year, have triggered a buying wave by central banks.

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US Federal Reserve voted to keep its benchmark overnight borrowing rate steady, but said cuts could begin to ‘come into view’, which could benefit China’s yuan, exports and capital flows, observers said.

A prominent Chinese economist has flagged two key risks that could keep pressure on the yuan: weaker-than-expected fiscal expansion and a further contraction in the property market.