HONG KONG Dec 5 Daily turnover in Hong Kong's
yuan settlement system, which serves the global renminbi market,
has surged as much as two-thirds since June as growing numbers
of international banks and companies use the Chinese currency.
Trade in the RMB Real Time Gross Settlement (RTGS) system
has reached 250 billion yuan ($40 billion) a day, the British
Consulate-General Hong Kong in a statement on Wednesday in
conjunction with an industry conference aimed at promoting wider
use of the yuan, or renminbi.
In June, daily trading volume on the system was around
150-200 billion yuan.
Hong Kong authorities extended the operating hours of the
trading system from 10 hours to 15 in June to help London and
other European financial centres with their yuan settlements.
There has also been a substantial increase in yuan corporate
accounts and foreign exchange trading in the London and Hong
Kong markets over the course of this year, the Consulate-General
London now accounts for the largest amount of yuan payments
conducted with Hong Kong and mainland China, as shown by the
most recent data released by global transaction services
The hefty increase in offshore turnover is likely to be
welcome news for Beijing, which has been slowly but steadily
moving to internationalise the currency.
Global interest in the yuan soared in the past few years as
Beijing encouraged more countries and companies to settle trade
deals in yuan. Banks from Hong Kong to Singapore and London
scurried to cash in on the trend by offering yuan-related
products to investors, betting that the yuan would continue to
appreciate in value for some time to come.
But progress has stalled for much of 2012 as the yuan
faltered against the U.S. dollar.
In recent weeks, authorities have taken several steps to
breathe life back into the market, and the yuan has hit record
highs onshore as the cooling Chinese economy shows signs of
A further deepening and broadening of the offshore yuan
market will in turn attract more interest from corporates,
according to representatives from 10 banks and more than 60
businesses across Europe who attended the second meeting of the
London-Hong Kong Renminbi Forum on Wednesday.
Global banks at the conference agreed to provide more
tailored yuan services for European companies to extend their
use of yuan in trade settlement and investment.
They also said they hoped to explore market solutions that
can enhance yuan liquidity beyond Asian trading hours, including
further development of standardised documentation for contracts
and use of the cross-border collateral management arrangements.
"We do think the RMB journey to become a global currency is
irreversible," said Ben Hung, chief executive officer of
Standard Chartered Hong Kong.
Since the group's first meeting in May, there has been
remarkable progress in terms of offshore yuan liquidity as well
as its usage by European corporates, he added.
The bank recently conducted a survey among top managers of
companies across Asia and Europe which found 76 percent of the
interviewees were either conducting yuan business already or may
consider doing so within half a year, while existing users were
more willing to expand their usage than non-users.
China Construction Bank (CCB), the country's No.2 lender,
launched a 1 billion yuan ($160.56 million) London-listed bond
last week, becoming the first Chinese borrower to tap the London
yuan bond market.
Standard Chartered expects offshore yuan bond issuance
globally to reach 250 billion yuan in 2013, compared with 185
billion yuan so far this year.
China Construction Bank, Citi, Industrial and Commercial
Bank of China, Barclays, Bank of China, Deutsche Bank, HSBC,
J.P. Morgan, Royal Bank of Scotland and Standard Chartered Bank
are the participating banks of the forum.