Hong Kong, a former British colony, still maintains its own currency, the Hong Kong dollar, but it started to offer banking services in the yuan, also known as the renminbi, in 2003. The new deal signed between the People’s Bank of China and the Hong Kong Monetary Authority expands the services from individual to corporate clients.
Under the new guidelines, companies can transfer yuan funds between different accounts for any purpose -- not just trade settlement. Individual clients can also transfer funds from their accounts without restrictions.
The loosened rules are expected to spawn new yuan-denominated financial products, such as funds, timed deposits, bonds and insurance policies, Hong Kong’s Ming Pao Daily News reported on Tuesday.
“I expect that many more types of financial intermediary activities denominated in the renminbi will be introduced in the market, helping Hong Kong’s renminbi business platform leap to new heights,” Hong Kong Monetary Authority Chief Executive Norman Chan said at the signing ceremony late Monday.
