Hong Kong’s monetary authority will launch a Renminbi (RMB) Business Facility from next month to support banks in offering yuan loans to companies, a move that aims to promote trade finance and direct investment as the city strengthens its role as an offshore yuan hub.
“The potential usage of the RMB Business Facility by participating banks in the facility is significantly broader than that of the RMB trade-finance liquidity facility, hence further strengthening Hong Kong’s leading position as the global offshore yuan business hub,” Yue told hundreds of bankers at the Treasury Markets Summit on Friday.
He said the facility would encourage more companies in mainland China and other overseas markets to use Hong Kong as a base to manage their corporate treasury activities and their regional business.
HSBC Holdings, Standard Chartered Bank and Bank of China (Hong Kong) are among the 24 lenders with access to the 100 billion yuan trade-financing facility launched in February, allowing them to obtain stable yuan to finance their customers’ trade-financing needs.
Under the current scheme, banks can get funding from the facility at a cost based on the onshore yuan interest rate plus a 25-basis-point premium to support trade settlement for their customers, who can arrange funding for one, three or six months.
