Renminbi funds are expected to remain expensive amid a weaker exchange rate, the Hong Kong Economic Journal reported Monday.
If the trend continues, funds could flee renminbi assets, the report said, citing Alex Cheung, managing director and head of institutional banking group of DBS Bank (Hong Kong) Ltd.
Also, recent interest rate cuts by the Chinese central bank have narrowed arbitrage opportunities between Hong Kong and the mainland.
The renminbi is down 1 percent against the US dollar this year.
Falling exchange rates and rising yuan fund costs resulted in slower growth for DBS last year, Cheung was quoted as saying.
However, the bank expects 10 percent growth this year and is planning to hire 10 new staff for the institutional banking group, he said.
This article appeared in the Hong Kong Economic Journal on March 9. [Click here]
Translation by Vey Wong
– Contact us at [email protected]