The People's Bank of China has abolished the daily 20,000 yuan ($3,260) conversion cap for Hong Kong residents effective Nov 17, the day that the Shanghai-Hong Kong Stock Connect program will be launched, the Hong Kong Monetary Authority said on Wednesday.

Banks will square positions arising from yuan conversions conducted by Hong Kong residents in offshore markets instead of onshore markets. As a result, restrictions for onshore conversion will no longer apply.

The change will allow Hong Kong residents to buy or sell the yuan more freely.