Hong Kong Monetary Authority Chief Executive Eddie Yue Wai-man wrote to CEOs of all banks in Hong Kong on Thursday to share successful examples in supporting corporate clients' yuan-related needs, calling lenders to further unlock the potential and opportunities in yuan business, especially in the real economy.
Yue pointed out in HKMA's official column inSight that companies encountered some challenges in using the yuan. For example, some corporates' internal systems may not yet support yuan transactions, while others have a limited understanding of the yuan products offered by banks, or have yet to fully appreciate the cost efficiencies that greater yuan usage can bring.
In view of these challenges, HKMA has actively collaborated with the industry and relevant mainland authorities to explore viable solutions, Yue noted.
Several banks have shared successful case studies, showcasing how yuan settlement as well as yuan-denominated investment and financing solutions can help corporates reduce costs, improve efficiency, and enhance flexibility in funding management, Yue added.
After reviewing and analysing these successful cases, HKMA has identified a set of good practices in six key areas:
1. Deliver tailored yuan products and services with comprehensive client coverage;
2. Actively leverage Hong Kong's yuan business strengths in serving clients;
3. Enhance authorized institutions' internal structure to fit yuan business strategies;
4. Enhance cross-boundary intra-bank collaboration and leverage overseas banking network;
5. Identify emerging opportunities along Chinese corporates' go-global journey;
6. Step up outreach and market promotion efforts.
Besides, he also unveiled that the HKMA will jointly organise the Hong Kong Fixed Income and Currency and Bond Connect Summit with the Securities and Futures Commission, Hong Kong Exchanges and Clearing (0388), and Bond Connect Company on July 7.
This flagship event will bring together policymakers, regulators and financial leaders to discuss the opportunities and future direction of Hong Kong's FIC markets and China's bond market, he added.
