Beijing Pushes for Hong Kong to Expand as Yuan Trading Hub
Beijing is preparing to announce further steps to promote Hong Kong’s role as an offshore yuan trading center, the South China Morning Post reported, citing a source familiar with the matter. These initiatives will likely include increasing the cap of RMB20,000 (US$3,142) that individuals can convert daily into other currencies and also lifting the limit of RMB80,000 on remittances sent to the mainland. Beijing and the Hong Kong Monetary Authority are considering these and other measures to boost renminbi-based business in the special administrative region at a time when interest in investing in renminbi is waning. Interest has flagged with expectations that the yuan exchange rate will remain stagnant against the U.S. dollar in 2012, in contrast to rapid appreciation in recent years. The amount of renminbi in Hong Kong accounts has fallen for five consecutive months, dipping to approximately RMB550 billion (US$86.4 million) at the end of April.