Source: CCTV.com

01-18-2007 11:33

The continuous appreciation of the RMB is having a knock on effect across the China region. Our reporter Deng Wei reports on its impact, in the Pearl River Delta region.

Currently, both the HK dollar and the Chinese yuan are widely used in the Pearl River Delta. However, experts say the continuously rising value of the RMB may cause residents around the region to gradually reduce their holdings of HK dollars. But the Bank of China says it hasn't seen a large scale of exchange.

Liao Weihua, forex analyst of Guangdong branch of Bank of China, said "Although the exchange rate of RMB to HK dollars has broken the 1:1 mark, local residents are not rushing to exchange. Currently, they are still exchanging according to their normal needs."

Experts say the value of the RMB will continue to increase in long term. It may also impact the exchange system between HK dollars and US dollars. But they also say as RMB is not a completely convertible currency, the possibility of HK dollars giving up its pegging to the US dollar is small in the short term.

Editor:Du Xiaodan