Date
30 March 2017
Renminbi deposits in Hong Kong saw a slower decline in October. Photo: Xinhua
Renminbi deposits in Hong Kong saw a slower decline in October. Photo: Xinhua

Tighter curbs on cross-border financing may affect RMB demand

Reports that the People’s Bank of China has tightened its oversight on cross-border financing may affect short-term demand for offshore renminbi as well as its interest rates in the city, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam said.

The supply of the Chinese currency in the city has become tighter recently, although interbank offered rates remain stable, the Hong Kong Economic Journal quoted Chan as saying.

His remarks came despite a slower decline in renminbi deposits in the city in October.

Meanwhile, the Ministry of Finance is selling a batch of two-year national bonds worth two billion yuan (US$312.8 million) to Hong Kong retail investors at an annual coupon rate of 3.45 percent, the highest in years.

Analysts expect the high yield to offset the recent negative sentiment on the outlook of the Chinese currency.

Investors eyeing renminbi time deposits or holding a long-term view on the Chinese currency may be more willing to lock up their money on the bonds for the decent yield, the analysts said.

[Chinese version中文版]

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