Money

HKMA welcomes overseas yuan fund investment

(Xinhua)
Updated: 2010-08-18 11:58

HONG KONG - Hong Kong Monetary Authority (HKMA) welcomed on Tuesday the People's Bank of China (PBOC)'s approval of Renminbi Clearing Bank and other eligible institutions outside the Chinese mainland to invest in the mainland's interbank bond market.

The PBOC promulgated Tuesday a notice on a pilot scheme for the Renminbi (RMB) Clearing Bank and other eligible institutions outside the Chinese mainland to make use of their RMB funds to invest in the mainland's interbank bond market.

Related readings:  China to allow sales of yuan products in HK soon: rpt  Pilot RMB settlement kicks off  China expands pilot program of yuan settlement  BOCHK nails down 34 yuan settlement deals

Under the pilot scheme, the Clearing Bank and Participating Banks of RMB Business in Hong Kong can conduct trading in the mainland's interbank bond market upon approval by the PBOC.

The Chief Executive of the HKMA Norman Chan said the HKMA will liaise closely with the PBOC on the implementation of the scheme, and will issue a circular to authorized institutions on this matter.

"The launch of the scheme has opened up a channel for RMB funds and financial institutions in Hong Kong to invest in the mainland. This will further promote the development of RMB trade settlement in Hong Kong, and enhance the attractiveness of RMB offshore business in Hong Kong," said Chan.

Furthermore, under the scheme, central banks and monetary authorities outside the mainland can also invest in the mainland's interbank bond market.

In this regard, Chan said the HKMA welcomes the new arrangement and will follow up with the PBOC accordingly.