Hong Kong doubles financing facility quota to boost offshore yuan lending

Hong Kong’s de facto central bank said on Monday it has doubled the quota of its yuan business facility to 100 billion yuan (HK$110.61 billion), expanding the programme to 40 participating banks in a move aimed at boosting offshore yuan financing and supporting the real economy.

The Hong Kong Monetary Authority said the second phase of the facility, which began on December 1, allows participating banks to apply for yuan funding within their assigned quotas to provide financing to local and overseas corporates.

The specific quota assigned to each of the 40 participating banks is based on the bank’s existing scale of relevant business, expected pipeline, as well as the geographical reach of its overseas intragroup banking entities, all of which reflect its potential in enhancing Hong Kong’s capacity in channelling offshore yuan funds to the global market, HKMA said.

Eddie Yue Wai-man, chief executive of the HKMA, said, “With the support from the People's Bank of China, the HKMA will continue to closely monitor the progress of the yuan business facility, and will consider adding more participating banks as appropriate, subject to actual facility usage and market demand, with a view to further promoting the use of yuan in the real economy and fostering the growth of offshore yuan business in Hong Kong.”