Renminbi Settlement For Hong Kong And Mainland China

In an interview on Hong Kong Radio, Hong Kong Under Secretary for Financial Services Julia Leung said that about 400 enterprises in the Chinese mainland have been selected to participate in a Renminbi cross-border trade settlement pilot program.

According to Leung, enterprises in Hong Kong will be able to settle trades in Renminbi through the banks with designated companies on the Chinese mainland.

She stated that the program can reduce the risks and costs arising from fluctuations in exchange rates, and Hong Kong banks can offer their Renminbi services to enterprises as well as individuals.

When asked whether the scheme includes trade financing, Leung said authorities in the Chinese mainland will announce the details soon.

"The Monetary Authority has made full preparations for the program including conducting tests on the Renminbi clearing system," Leung said, adding: "the system can start operation once the Chinese mainland comes up with the operational details."

When asked whether the Hong Kong Special Administrative Region government will drop the peg to the U.S. dollar, the under secretary said the system has been worked well and the Hong Kong government has no plans to change it.

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