Media365
More companies are using Hong Kong as a platform to tap yuan funds to finance their operations, thanks to the city’s active capital market and a new 200 billion yuan (US$28.68 billion) liquidity facility that provides steady, cheap yuan funding, according to a Standard Chartered report on Wednesday.
Among companies that have yuan exposure, about 24 per cent said they would like to increase yuan financing over the next three years, according to Standard Chartered, citing the results of a survey of 300 global firms across 19 sectors.
Hong Kong has almost 1 trillion yuan of bank deposits, while lenders can also tap cheap and stable yuan funds from the Hong Kong Monetary Authority’s (HKMA) RMB Business Facility.
Launched in February last year, the facility initially had a 100 billion yuan quota for 40 banks, including Standard Chartered, to arrange yuan loans for their clients. The facility was so popular that the People’s Bank of China supported the HKMA in doubling the amount to 200 billion yuan starting in February this year.
“We are seeing an increasing number of international companies extensively using yuan in areas such as cross-border trade, procurement and supply chains,” said Karen Ng, head of China opening and RMB Internationalisation at Standard Chartered.
“Hong Kong has also introduced a range of measures to enhance offshore yuan liquidity and facilitate trade financing,” she said.
