The city was already the world’s biggest offshore yuan business centre, with the largest offshore liquidity pool, foreign-exchange market and over-the-counter market for interest-rate derivatives, Under Secretary for Financial Services and the Treasury Joseph Chan Ho-lim said on Tuesday.
Yuan deposits in Hong Kong reached 1.1 trillion yuan (US$151 billion) at the end of last year, providing funding for growing global offshore transactions and financial activities, Chan added at a Bank of China (Hong Kong) forum.
“Hong Kong’s role as [mainland China’s] international financial centre in promoting the internationalisation of the yuan is crucial,” he said.
Beijing’s support, in the form of policy measures and bond issuances, has helped Hong Kong’s offshore yuan liquidity to grow. The Ministry of Finance has issued offshore yuan bonds in Hong Kong for 17 consecutive years, totalling 366 billion yuan as of last year.
The ministry is set to sell another 12.5 billion yuan in debt on Wednesday, comprising tranches with tenors of two, three, five, 10 and 30 years.
