Source: CCTV.com

01-12-2007 10:43

This week, the State Council agreed to let the country's financial institutions issue yuan-denominated bonds in Hong Kong. The move will boost Hong Kong's status as a financial center, and economic activities between the mainland and the SAR.

The People's Bank of China said it will offer corresponding clearing arrangements for mainland financial institutions issuing RMB financial bonds in Hong Kong. The technical preparations are

underway and the business will be introduced after the relevant preparation work is completed. Hong Kong's financial circle hailed the decision, saying the move is a milestone for RMB entering the international market.

Joseph Yam, chief executive of Hong Kong Monetary Authority said: "It is the first time for mainland financial institutions to issue RMB-denominated bonds outside the mainland, and the first step for the Chinese yuan to enter the international arena. This is an extremely important move for Hong Kong."

The new measures also expands Hong Kong banks' RMB business. Yam added that Hong Kong's Real Time Gross Settlement System will be unique in the world, covering four currencies - the RMB, Euro, US and Hong Kong dollars. He says, this will be crucial to Hong Kong's status as an international financial hub.

David Li, president of Bank of East Asia said: "I believe the Chinese yuan will gradually become as popular here as the Hong Kong dollar. In ten years time, both currencies will have equal status."

Meanwhile, the value of the Chinese yuan was set above 7.8 at 7.7977 against the US dollars. This is the level at which Hong Kong has pegged its currency to the US dollars. It is the first time at in thirteen years the value of the Chinese yuan has overtaken the Hong Kong dollar.

 

Editor:Li Yang