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Offshore RMB to be HK's 2nd largest source of deposits

Xinhua | Updated: 2013-02-01 11:02

HONG KONG - Hong Kong's offshore renminbi deposits, excluding Certificate of Deposits, could account for over 25 percent of total deposits in the city by 2015, making?renminbi deposits the second-largest source of deposits in Hong Kong, Hang Seng Bank said in a report Thursday.

Chief Economist of Hang Seng Bank Joanne Yim, the writer of the report, said that the?renminbi looks set to gain importance in the global economy and Hong Kong stands to benefit as an offshore?renminbi center.

She said the?renminbi exchange rate is expected to maintain a slightly firmer position against the US dollar in 2013, with expectations of a rebound in the mainland's exports and the resulting trade surplus.

The PBOC's USD/RMB mid-rate is likely to be near 6.20 by the end of 2013, representing an appreciation of 1.4 percent for the?renminbi compared with the end of 2012, she added.

As for offshore?renminbi deposit, she said Hong Kong's offshore renminbi deposit pool, excluding CDs, could grow at a faster pace, reflecting an expected rebound in cross-border trade settlement flows and potentially higher deposit interest rates as banks compete for?renminbi deposits.

As a result,?renminbi deposits could account for over 25 percent of total deposits in Hong Kong by 2015, from less than 10 percent at the end of 2012. This will make?renminbi deposits the second-largest source of deposits in Hong Kong, replacing the position long held by US dollar deposits.

In addition, with the?renminbi gaining increasing acceptance globally, more companies will choose to settle their cross-border trade in renminbi.

"The amount of cross-border trade settlement in?renminbi could grow by about 20 percent in 2013, faster than Hong Kong's total trade flows with the mainland," the report said.

 

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