Media365
When Hong Kong businessman Sunny Yip Yuk-chik heard about a new scheme that would make it easier and cheaper to borrow Chinese yuan, he immediately called his staff on the Chinese mainland with the news.
Earlier this month, the Hong Kong Monetary Authority (HKMA) launched a 100 billion yuan (US$14 billion) Renminbi Business Facility (RBF) that would enable business owners like Yip to borrow yuan from Hong Kong banks for up to 12 months at the onshore yuan interest rate, easing trade settlements.
“I would consider a yuan loan to expand my business on the mainland because it avoids the exchange rate risks and the cost is cheaper than loans in Hong Kong dollars,” said Yip, who operates a sewage treatment plant in Zhaoqing in the Greater Bay Area.
Hong Kong dollar interest rates are more than double those of mainland yuan loan rates.
The RBF was among a range of measures announced by Hong Kong and mainland regulators to promote the city as a leading offshore yuan trading centre and to encourage more international investors and companies to use the Chinese currency.
In December, the scheme will be expanded to include direct investments for mainland firms to secure yuan loans to invest overseas or for foreign firms to get yuan funding to expand on the mainland.
