Yuan bond issue to rise in HK
Updated: 2009-04-21 07:21
By Liu Yiyu(HK Edition)
|
|||||||
BOAO, Hainan: The central government's decision to allow the issue of more yuan-denominated bonds in Hong Kong will help bolster the city's position as one of the world's major financial centers, Hong Kong Monetary Authority (HKMA) Chief Executive Joseph Yam said yesterday.
He said plans to allow the Ministry of Finance to issue yuan bonds in Hong Kong will also go a long way in increasing the liquidity of renminbi transactions here even as it also facilitates further the internationalization of the Chinese currency.
Yam's comments came following the central government's announcement over the weekend of a raft of support measures aimed at helping Hong Kong weather the global economic crisis.
The measures were announced following Chief Executive Donald Tsang's meeting with Premier Wen Jiabao at the Boao Forum on Hainan Island.
Under the package of support measures, the number of financial institutions allowed to issue yuan-denominated bonds in Hong Kong is to be expanded, the level of yuan bond issues is to be raised and branches in Hong Kong of mainland banks will also be allowed to issue yuan bonds.
Under the central government's new support measures, Hong Kong enterprises in Shanghai and Guangdong will also be allowed to use assets in Hong Kong as collateral for securing loans from mainland branches of Hong Kong banks.
Analysts said this move will help Hong Kong enterprises expand their financing sources and overcome financial difficulties.
"Amid talks of turning Shanghai into a major international financial center, the announcement of these support measures is definitely a positive signal for Hong Kong," said Paul Tang, economist at Bank of East Asia.
Analysts said the biggest concern following the central government's latest assistance to Hong Kong is the small size of renminbi deposits in local banking institutions.
(HK Edition 04/21/2009 page16)