Outlook for RMB internationalization promising on back of mainland monetary incentives: HKMA chief executive

HONG KONG, Sept. 27 (Xinhua) -- The outlook for RMB internationalization remains promising supported by a combination of cyclical as well as structural factors, said Eddie Yue, chief executive of the Hong Kong Monetary Authority (HKMA) on Friday.

In the near to medium term, the accommodative monetary policy environment on the Chinese mainland is expected to continue, and this will incentivize banks and corporates to use RMB as a funding currency, Yue said in a keynote speech at the Treasury Markets Summit 2024 held in Hong Kong.

Yue went on to expound on an array of favorable factors in the longer term. More mainland companies in the real economy are seeking overseas expansion as the global supply chain continues to reconfigure. RMB-based activities in sectors of the real economy will further increase demand for RMB products, treasury management, longer-term investment and risk management.

Hong Kong, as the premier offshore RMB hub, is uniquely placed to serve as the go-to platform that serves different stakeholders while enabling its financial sector to capture the ever-growing opportunities, he said.

To foster Hong Kong's offshore RMB business, Yue said the HKMA is studying possible ways to enhance the availability of RMB liquidity to banks and will work with fellow regulators to keep expanding the suite of connectivity schemes between the capital markets of the Chinese mainland and Hong Kong.