Business
Surge in Chinese Yuan Deposits in Hong Kong Surpass 1 Trillion Mark, Bolstering City’s Role as Top Offshore Hub
Deposits of Chinese yuan in Hong Kong surpass 1 trillion, solidifying the city's position as an offshore hub. Boosts in stock market outlook and a rising demand for yuan from corporations are fueling this surge, as stated by experts.
Chinese yuan deposits in Hong Kong hit a high of 1.06 trillion yuan (US$149.5 billion) in July, solidifying the city's position as the biggest offshore yuan center and boosting the currency's global exposure.
The Hong Kong Monetary Authority reported on Friday that Yuan deposits in July surpassed 1 trillion yuan for the fourth consecutive month, even though they decreased by 0.4 per cent.
The overall remittance in yuan for international trade settlement hit 1.28 trillion yuan, marking a 1.6 per cent increase from June.
The rise in yuan deposits in Hong Kong has been attributed to a better outlook in the equity market and a growing demand for yuan in business transactions and operating capital, say analysts.
The Hang Seng Index increased by 7% in Q2, bouncing back from a 14% drop in 2023 and a 3% decrease in the initial quarter of the year. The trade volume of shares bought and sold in Hong Kong by mainland Chinese investors through the Stock Connect's southbound channel also surged in April and May, recording an average of 35 billion yuan and 52 billion yuan respectively, contrasted with 28 billion yuan in Q1.
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