Monetary Authority
The Hong Kong Monetary Authority is the government authority responsible for maintaining monetary and banking stability. It maintains currency stability within the framework of the Linked Exchange Rate system, helps maintain Hong Kong's status as an international financial centre, and manages the Exchange Fund.
The Monetary Authority has welcomed the People's Bank of China's announcement today of a pilot scheme for the settlement of overseas direct investments in renminbi.
Mainland enterprises will be able to conduct direct investment overseas using renminbi. Hong Kong branches and correspondent banks of Mainland banks can also obtain renminbi funds from the Mainland and extend renminbi lending to the enterprises conducting the investments.
Monetary Authority Chief Executive Norman Chan said the scheme will further enhance the circulation of renminbi funds for trade and investment activities.
Hong Kong has long been the prominent platform for the Mainland's outward direct investments. In 2008 and 2009, the Mainland's outward direct investments amounted to US$55.9 billion and US$56.5 billion, of which 69% and 63% was invested in Hong Kong or through Hong Kong to other parts of the world.
Upon implementation of the pilot scheme, Mainland enterprises can conduct such investments through Hong Kong's offshore renminbi centre, and at the same time make use of the multi-currency and multi-functional financial platform in Hong Kong for related financing and fund management activities.
