Hong Kong capable of further expanding its offshore RMB business
Jun 01, 2018 (China Knowledge) - Hong Kong can expand its offshore RMB business and further strengthen its position as the global offshore RMB business hub, according to former PBoC governor, Zhou Xiaochuan.
The city can leverage on the growing market, where increased international use of RMB is expected following the country's RMB internationalization drive. He cited key developments, such as addition of RMB into IMF's special drawing rights (SDR) basket alongside the U.S dollar, the yen, the euro and the pound, as key recognition for its global currency status.
He highlighted that the mutual access of capital markets between Mainland China and Hong Kong means it is important to ensure there is sufficient offshore RMB liquidity.
Earlier last month, PBoC announced measures to support its offshore yuan market by allowing banks involved in offshore yuan clearing and settlement to tap on liquidity from the onshore market. This comes in light of China's MSCI entry at that time. The demand for offshore yuan is expected to surge as foreign money flows into yuan-denominated A-shares via the cross-border stock connect schemes with Hong Kong.
Being a well-established global hub for finance, Hong Kong remains a world gateway to China opportunities.
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