Money

RMB development in HK not to pose risks to mainland

(Xinhua)
Updated: 2011-05-12 09:47

HONG KONG -- Renminbi business development in Hong Kong, with relatively limited renminbi deposits, will not pose risks to financial stability on the mainland, said K. C. Chan, secretary for financial services and the treasury of the city government on Wednesday.

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Though Hong Kong's renminbi offshore business is developing rapidly, its total renminbi deposits, reaching 451.4 billion yuan ($69.55 billion) by the end of March this year, was just equivalent to 0.5 percent and 4.2 percent of total assets of mainland's banking system and Hong Kong's banking system respectively, said Chan.

Meanwhile, the deposits were mainly from the net trade receipts from mainland and these cross-border trade activities were genuine transactions which supported real economic activities, and were conducted in accordance with the regulations of mainland authorities and policies, said Chan, while addressing the city's legislative council in the day.

"We are not aware of any financial institutions making use of the conversion window of renminbi trade settlement to conduct speculative activities," he added.

Besides, as mainland's financial market is segregated from that of Hong Kong, the activities of financial institutions in Hong Kong in the renminbi market were insulated from the mainland, he added.

"Hong Kong in effect is providing a firewall between onshore and offshore renminbi market," he said. ($1 is equivalent to 6.49 yuan)