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Friday 6 March 2009
HK to settle trade in yuan
China will soon allow Hong Kong to settle cross-border trade in the Chinese yuan, the central bank governor said Friday, in a move seen as a step towards the greater convertibility of the currency.
BEIJING - China will soon allow Hong Kong to settle cross-border trade in the Chinese yuan, the central bank governor said Friday, in a move seen as a step towards the greater convertibility of the currency.
'There will be no big obstacle for trade settlements in yuan (with Hong Kong),' Zhou Xiaochuan, head of the People's Bank of China, said at a briefing on the sidelines of the nation's parliament.
'Policies are expected to be introduced smoothly and will not take much time,' he said.
He did not offer further details.
China announced in December that it intends to allow the yuan to be used as a settlement currency in transactions with Hong Kong and later with the 10 Asean countries.
State press reports have said that such measures were initial steps towards the eventual full convertibility of the yuan, which is the stated goal of the government.
At present, the yuan or RMB is not freely convertible on the current account, but is pegged to a basket of currencies and strictly controlled by the nation's foreign exchange authorities.
In 2003, Hong Kong started yuan settlement trials for individual tourism and shopping purposes. China has been Hong Kong's largest trading partner since 1985.
Using the yuan as a settlement currency for trade between Hong Kong and the mainland is expected to boost bilateral trade by improving the transparency of product pricing, state press reports said.
It can also cut firms' exchange costs and give them greater flexibility in dealing with changes in yuan pricing, the reports added.
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HK to settle trade in yuan
AFP
6 March 2009
BEIJING - China will soon allow Hong Kong to settle cross-border trade in the Chinese yuan, the central bank governor said Friday, in a move seen as a step towards the greater convertibility of the currency.
'There will be no big obstacle for trade settlements in yuan (with Hong Kong),' Zhou Xiaochuan, head of the People's Bank of China, said at a briefing on the sidelines of the nation's parliament.
'Policies are expected to be introduced smoothly and will not take much time,' he said.
He did not offer further details.
China announced in December that it intends to allow the yuan to be used as a settlement currency in transactions with Hong Kong and later with the 10 Asean countries.
State press reports have said that such measures were initial steps towards the eventual full convertibility of the yuan, which is the stated goal of the government.
At present, the yuan or RMB is not freely convertible on the current account, but is pegged to a basket of currencies and strictly controlled by the nation's foreign exchange authorities.
In 2003, Hong Kong started yuan settlement trials for individual tourism and shopping purposes. China has been Hong Kong's largest trading partner since 1985.
Using the yuan as a settlement currency for trade between Hong Kong and the mainland is expected to boost bilateral trade by improving the transparency of product pricing, state press reports said.
It can also cut firms' exchange costs and give them greater flexibility in dealing with changes in yuan pricing, the reports added.
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