The People's Bank of China yesterday relaxed restrictions on yuan transactions for Macau residents in a move that plays catch-up with Hong Kong and seeks to broaden the international use of the currency. The central bank said Macau residents would soon be able to exchange the equivalent of 20,000 yuan (HK$22,704) per person per day, up from 6,000 yuan. Macau residents with local yuan accounts will also be allowed to write yuan-denominated cheques for purchases in Guangdong province, capped at 50,000 yuan per account per day. Macau 'designated merchants' permitted to engage in yuan business will be expanded to include those engaged in communications, educational services and the conference and exhibition business. 'The measures will be gradually implemented when technical arrangements are in place,' the bank said yesterday in a statement on its website. All the new liberalisations for Macau have been in place in Hong Kong since 2006 after being announced by Chief Executive Donald Tsang Yam-kuen in his 2005 policy address. Moreover, Hong Kong residents have since 2006 been able to write yuan cheques for up to 80,000 yuan per account per day, or to remit the same amount between yuan-denominated personal accounts in Hong Kong to 'same name' accounts on the mainland. Likewise, in Hong Kong, the list of 'designated merchants' that can do yuan business was expanded four years ago to include seven categories: retail sales, catering, accommodation, transport, communication, medical services and education. The PBOC announcement of the yuan business expansion comes as Beijing prepares to celebrate the 10th anniversary of Macau's handover to the mainland on December 20. China has launched a series of initiatives in recent years designed to help internationalise the use of its currency, but has stopped short of making the yuan freely convertible and maintains a tight grip on its exchange rate against the US dollar. Since July this year, Beijing has been allowing designated mainland firms to settle export and import trades with companies in Hong Kong, Macau and members of the Association of Southeast Asian Nations in yuan rather than in foreign currencies such as the US dollar. But the scheme has been slow to gain traction. So far, only about 400 mainland enterprises in the five approved cities - Shanghai, Guangzhou, Shenzhen, Dongguan and Zhuhai - can settle their trade in yuan with their counterparts in Hong Kong, Macau and Asean countries. In the first month of the trade settlement scheme, only 66 transactions for 42.8 million yuan (HK$48.66 million) were conducted between Hong Kong and the mainland, Hong Kong Monetary Authority data shows. Currency push The move is part of Beijing's initiatives to internationalise the yuan Estimated number of mainland firms in five cities that can settle trades in yuan: 400
