HK's plans to scale up yuan usage will not undermine peg system: Christopher Hui

Hong Kong's plans to scale up the use of yuan for settling government expenditure would not undermine the peg system, said Secretary for Financial Services and the Treasury Christopher Hui Ching-yu.

Mainland investors will be allowed to buy stocks and pay stamp duty in the Chinese currency when the yuan counter is included in the Stock Connect southbound trading in the future, Hui said at a radio program on Thursday.

The government is expected to receive some revenue in the yuan and to mitigate potential exchange rate risks, more expenditure settlements in the currency are needed, Hui said.

He further stated that the tendering mechanism of seven-day offshore yuan liquidity and the issuance of offshore yuan short-term debt instruments are both supporting measures designed to enhance the circulation and liquidity of the currency. 

As more institutions become willing to use the yuan, investors will be able to obtain the currency for investment and financing through more convenient and rational arrangements, he added.

𝗗𝗼𝘄𝗻𝗹𝗼𝗮𝗱 𝗧𝗵𝗲 𝗦𝘁𝗮𝗻𝗱𝗮𝗿𝗱 𝗔𝗽𝗽 ↓