CEIC Data Blog

Hong Kong as an Offshore Renminbi Centre

 

Database NEWS@lert: In 2004, Hong Kong became the first offshore market to launch Renminbi (RMB) deposit-taking business. Ever since, Hong Kong’s RMB business has been developing significantly in different dimensions, including currency exchange, remittance, credit and debit cards, cheques, trade settlement, dim sum bond issuance and trading, as well as RMB denominated Initial Public Offering (IPO) and stock trading. While RMB internationalization continues to proliferate in other financial markets, Hong Kong remains the premier offshore RMB financial platform, possessing the largest pool of RMB liquidity outside of mainland China.

In this connection, the CEIC Hong Kong database has incorporated different RMB related statistics, providing useful information for monitoring and assessing the dynamics of offshore RMB businesses in Hong Kong.

RMB Deposits, Remittances and Clearing Transactions
Hong Kong RMB
Chart provided by: CEIC

Hong Kong’s offshore RMB businesses continue to expand and reach new milestones. Hong Kong’s RMB deposit saw its highest volume of RMB 627 billion in November 2011. In the same month, RMB cross-border remittance climbed to RMB 184 billion, increasing by 97.36% from RMB 93.7 billion a year ago. Moreover, the amount of RMB clearing transaction averaged to RMB 1,894 billion a month in 2011, which was three times more than that of 2010. New issues of dim sum bond in 2010 has also amounted to RMB 36 billion, more than doubling the issuance amount of RMB 16 billion in 2009.

In recognizing the increased liquidity and maturity of Hong Kong’s offshore RMB market, the Hong Kong Monetary Authority has recently relaxed a number of regulations, allowing banks to further expand their RMB businesses. For example, banks’ dim sum bond holdings can now be counted as part of their risk management requirements. Also, banks’ RMB net position limit is raised from 10% of total RMB assets to 20%. These adjustments will help better align the growing demand with the development pace of RMB businesses, hence further strengthening Hong Kong’s role as an offshore RMB business center.

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