China to kick off cross-border yuan loans in pilot zone near Hong Kong
SHANGHAI Jan 28 (Reuters) - China will kick off cross-border yuan lending in a pilot zone near Hong Kong on Monday, when eight to 10 Hong Kong-based banks sign agreements for yuan loans to mainland Chinese firms for the first time, the official Shanghai Securities News reported.
The agreements are a step towards opening China's capital account and internationalising its currency.
The banks will include HSBC Holdings Plc , Hang Seng Bank, Bank of East Asia Ltd and Hong Kong branches of several Chinese banks, such as the Industrial and Commercial Bank of China , the newspaper said. It cited as its source an unidentified financial official in the booming southern Chinese city of Shenzhen.
China has announced that it would allow firms in Qianhai, a special economic zone in Shenzhen near Hong Kong, to take out yuan loans from banks in Hong Kong, with tenors and interest rates to be set independently, also a major step towards liberalising the country's interest rate mechanisms.
The newspaper said the collective signing of lending agreements on Monday signalled the official launch of the pilot programme for large-scale, cross-border loans.
More details about the banks and companies involved in the first batch of cross-border loans will emerge at the signature ceremony, it quoted the Shenzhen financial official as saying.
The project was first announced in June as Hong Kong marked the 15th anniversary of its return to China.
The People's Bank of China has since said that the cross-border yuan loan business would give Qianhai important financial support and, at the same time, accelerate the cross-border use of the Chinese currency.
The Chinese central bank has also said the move would increase the scale of Hong Kong banks' yuan loan services and bolster liquidity in the offshore yuan market.
- Dallas Ebola patient vomited outside apartment on way to hospital |
- Israel's Netanyahu to Obama: Don't allow Iran deal that leaves it at nuclear threshold
- Turkey vows to fight Islamic State, coalition strikes near border |
- First Ebola case diagnosed in the United States: CDC |
- Hong Kong leader plays waiting game, protesters demand he resigns |