CHINA / Taiwan, HK, Macao |
HK expects yuan Bonds, settlement soon(Shenzhen Daily)Updated: 2006-12-29 09:29 Hong Kong Chief Executive Donald Tsang said he expects the Central Government to widen the territory’s yuan business soon, allowing local companies to settle payments for mainland imports in yuan and for yuan bonds to be issued in Hong Kong. “I think we have brought it to almost finality, which is satisfactory. And I expect the good news will be forthcoming from the Central Government very shortly,” Tsang said late Wednesday during his last duty visit to Beijing before Hong Kong’s next leader is chosen in March. The Central Government said in June the State Council, or Cabinet, was mulling plans to allow mainland financial institutions to issue yuan-denominated bonds in Hong Kong on a pilot basis. The Central Government said Hong Kong companies might also be allowed to settle mainland imports with the yuan, instead of the U.S. dollar, therefore eliminating the forex risks involved. The settlement initiative would facilitate the imports of mainland goods into Hong Kong, which now amount to about US$3 billion a year. Standard Chartered PLC economist Frances Cheung said the immediate benefit from the yuan measures will be limited. “The impact will only kick in gradually,” she said, because the total amount of yuan deposits in Hong Kong remains relatively small at 22.6 billion yuan (US$2.89 billion). “It would be best if Hong Kong banks are allowed to conduct other related financial or derivatives products,” Cheung said. But Cheung said the measures, if they materialize, will promote the yuan as an internationally accepted currency. |
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