MNI BRIEF: HK To Upgrade Role As Yuan Offshore Hub-HKMA's Yue

Hong Kong will increase yuan liquidity, enrich Connect Schemes with Mainland and upgrade infrastructure for cross-border investment in a bid to maintain its role as the leading offshore yuan business hub, Hong Kong Monetary Authorities Chief Executive Eddie Yue said on Friday at the 2023 Bund Summit in Shanghai.

Currency Swap Agreements with the PBOC will be enhanced to meet demand for the yuan and the yuan-denominated products and tools will be increased for cross-boundary investment, asset allocation and risk management, Yue said. He pointed to the mBridge project, a collaboration with the BIS and a number of central banks including the PBOC which speed up cross-border payments at reduced cost and with better transparency in wholesale trading.

With an increasing number of economies, including those in ASEAN, wanting to use yuan to settle trade with China, Hong Kong will introduce more efficient infrastructure, Yue said, calling for more integration of trade and supply chain linkages in Asia. (See MNI INTERVIEW: Wider Yuan Use Needs More Assets, Offshore Hubs)