Hong-Kong and UK agree further action to support development of London-Hong Kong offshore renminbi (RMB) market.
Further action has been agreed to support the continued development of the London – Hong Kong offshore renminbi (RMB) market at the third London – Hong Kong RMB Forum.
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Attended by Financial Secretary to the Treasury, Greg Clark, and acting CEO of the Hong Kong Monetary Authority (HKMA), Eddie Yue, the Forum reviewed developments in the offshore market of the Chinese currency renminbi over the course of the last year.
The representatives from the London and Hong Kong offices of leading banks in the global RMB market agreed to continue raising corporate awareness of RMB and make it more user-friendly and accessible, as well as developing market facilities that enhance liquidity within the offshore market.
Representatives also agreed to promote and expand channels of RMB flows between mainland China and the offshore market.
Greg Clark welcomed the continued cooperation between the Hong Kong and the UK in developing the offshore RMB market and the recent developments in the London market.
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By GlobalDataWith trading in RMB in London increasing three-fold over 2012, and a significant increase in the range of available products and services, there is a clear momentum behind London’s development as the western hub for RMB. And Hong Kong has cemented its position as the main gateway between the onshore and offshore RMB markets, with RMB 400 billion settled in Hong Kong daily.
The Forum first met in Hong Kong in May 2012, and then in London in December 2012, where Banks agreed to a programme of work to support the development of the offshore market.
Since the December meeting, the Bank of England and People’s Bank of China have signed an RMB-sterling swap line. This is an agreement between the People’s Bank of China and the Bank of England that up to RMB 200 billion could be made available to the Bank of England to support the London RMB market in the UK in the event of a liquidity shortage causing a risk to financial stability.
In July, it was announced that the RMB Qualified Foreign Institutional Investor (RQFII) pilot would be extended to London also. This is a pilot scheme which allows offshore financial institutions to apply for a license to invest offshore RMB into onshore Chinese investments.
