Hong Kong will be a mini renminbi market, JPMorgan report

Illustration: RMB cross-border settlement of the new five, Xinhua Beijing, July 15, JPMorgan Chase 14th reported that the renminbi Cross-border trade settlement will promote the formation of a mini-renminbi interbank lending market in Hong Kong, in the long run, the bank will be able to provide renminbi trade financing to enhance interest income capacity.　　According to the Hong Kong "Wen Wei Po", Chen, deputy general manager of BOC Hong Kong Corporate Banking and financial institutions, said since the introduction of Cross-border renminbi trade settlement, more than 20 Hong Kong banks have signed a liquidation supplementary agreement with the bank, and Southeast Asian, European, American and Japanese banks have expressed interest in participating in the Cross-border renminbi trade settlement business in Hong Kong. According to the report, the renminbi interest rate in Hong Kong will depend on market forces rather than the central decision in the mainland, so there will be a mini renminbi interbank lending market in Hong Kong.　　The bank's statement that the long-term settlement of cross-border trade in renminbi will allow Hong Kong to establish a larger renminbi deposit base, which would affect the financing of companies. The report notes that, in addition to deposits from individual clients, banks rely on interbank lending and foreign exchange for renminbi sources of funds, but the amount is limited by the bank's own clients ' renminbi deposit base, so short-term inward renminbi trade financing has a limited positive impact on bank interest income.　　The report also points out that since BOC Hong Kong is an offshore clearing house, plus its relationship with the Bank of China, it has an advantage in the wholesale banking platform, thus giving it a "outperform market" rating. Chen pointed out that, under the management approach, Hong Kong's participating banks could participate in cross-border renminbi trade settlement through clearing bank mode or agency mode, so there was no monopoly in the bank.　　However, he pointed out that under the authority's documents, the liquidation of the Bank would be in addition to the higher amount of demolition, and the time of the demolition period would be more than 3 months, which would be better than that of the mainland counterparts in 1 months. As for the settlement amount reached by the bank, Chen said that as the measures were implemented on a pilot basis and the implementation time was short and new trade was produced daily, it was hoped that the statistics would not be available until one months after implementation. He also pointed out that, as at the end of last month, Hong Kong had a renminbi deposit of $54 billion, which had enough "bullets" to deal with the nascent Cross-border renminbi trade and settlement business, and that the total amount of renminbi deposits in Hong Kong would increase as the scale of trade grew.