The wider use of Renminbi in Hong Kong or beyond will need to be a gradual process and Hong Kong provides a useful testing ground for cautiously implementing the yuan liberalization measures, Hong Kong Monetary Authority (HKMA) Chief Executive Joseph Yam said here Thursday.
In his weekly Viewpoint column published on the HKMA's official website here Thursday, Yam said that the Chinese mainland continues to rise rapidly as an important force in global trade and production and the Renminbi, or yuan, is gaining flexibility within a framework established in July 2005.
"There are also indications of an increasing use of the yuan currency outside the Chinese mainland, although this is from a low base and so far pretty much limited to regions that are closely linked to the Chinese mainland," said Yam, chief of the city's de facto central bank.
"Being the currency of an economy of growing strength and which is undergoing progressive financial liberalization, it is natural to expect the use of Renminbi in other jurisdictions will be more widely accepted over time," he added.
Since mid-December, China has signed currency swap contracts worth 650 billion yuan (about 95.6 billion U.S. dollars) with six central banks in Hong Kong, the Republic of Korea, Malaysia, Belarus, Indonesia and Argentina.
The swap deals allow other overseas central banks to lend yuan to local importers who want to buy Chinese goods.
China announced this month a pilot program to allow exporters and importers in five cities to settle cross-border trade deals in Renminbi, namely Shanghai, Guangzhou, Shenzhen, Zhuhai and Dongguan.
Hong Kong currently remained the only jurisdiction outside the Chinese mainland to provide RMB banking services.
Source: Xinhua
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