HK says it welcomes broader trading band for yuan

“It doesn’t really upset Hong Kong’s position, because the Hong Kong dollar is linked to the US dollar. The renminbi (yuan) is just beginning to become more of an international currency,” Hong Kong Financial Secretary John Tsang said in a group interview recently.
The People’s Bank of China now allows trading of 1 per cent either way from a daily fixing, after keeping the limit at 0.5 per cent since May 2007. China has increased the use of the yuan to settle cross-border trade, undertaking a series of reforms in recent years.
Hong Kong is the major offshore business centre for the use of the currency in terms of mobile banking, bonds, trade settlements and yuan-denominated instruments.
In 2011, yuan trade settlements through Hong Kong’s banks reached 1.9 trillion yuan (about Bt9.3 trillion), accounting for 92 per cent of total yuan trade settlement last year.
“They ?? what?? are all in use in Hong Kong. It [ Tsang said the widened trading band “gives greater flexibility and provides room for the yuan to become more of an international currency. So that is a very positive development for the future.”
The growing volume of trade settlements in Hong Kong has expanded the pool of yuan liquidity in the city’s financial system. This trend is expected significantly to increase Hong Kong’s share of the global banking industry and status as China’s global financial centre, he said.
At the end of January, total yuan deposits in Hong Kong were about 576 billion yuan.
Up to the end of February, 134 yuan bond issues had been offered worth almost 200 billion yuan. Last year alone there were 91 bond issuances worth 107 billion yuan.