Offshore Market for Yuan to Expand as Banks Promote Global Use
The offshore market for the Chinese yuan will expand as banks take steps to strengthen the global platform for the currency’s trade, the U.K. Treasury said.
Daily turnover in Hong Kong’s Renminbi Real Time Gross Settlement system, which serves the global yuan market, has reached 250 billion yuan ($40.16 billion), the treasury said on its website.
China is encouraging global use of the yuan and allowing more overseas investors to access its local capital markets in an effort to shift the focus of economic growth to domestic demand and away from slowing export industries.
Banks have taken advantage of the system’s longer operating hours in Hong Kong, the major offshore yuan trading hub. The average turnover during the late operating hours is providing an additional 2 billion yuan per day, the banks said.
Eight banks joined the cross-border collateral management system, and the first yuan repo transaction was conducted yesterday, the treasury said.
The yuan climbed 0.05 percent to 6.2256 in Shanghai after the central bank raised the currency’s reference rate on signs the economy is rebounding. The currency advanced 0.22 percent in November, extending gains since the end of July to 2.25 percent.
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