December 2, 2012 /D.Collins
Hot money is flowing into Hong Kong to buy up renminbi, leading to a
shortage of money changers in the city who can supply the Chinese
currency.
It is generally difficult to buy large amounts of renminbi
from underground money changers in Hong Kong, since they don’t have
huge reserves in hand. The owners of many foreign exchange outlets in
Hong Kong report that in the past two months, demand for the renminbi
has jumped 20%.
In 2011, the renminbi appreciated by close to 5% against the US dollar.
Hong Kong banks were reluctant to offer higher interest rates for
renminbi deposits due to the rules on renminbi trading and the limited
use for renminbi deposits within Hong Kong’s banking system. This year,
however, the scope for the use of renminbi has expanded considerably
and banks have begun to scramble for deposits, leading to rising demand
for renminbi in the market.
The Guangzhou Daily reports that major Hong Kong banks are soliciting
renminbi deposits, raising the annual interest rate for renminbi deposits
to around 3%, and are vying for renminbi wealth management products.
The Bank of China, for instance, is selling a wealth management product
with a two-month term which boasts yield rate of 3.9%, compared with
the meager 0.2% annual interest rate for one-year Hong Kong dollar
deposits... More>
Hot money is flowing into Hong Kong to buy up renminbi, leading to a
shortage of money changers in the city who can supply the Chinese
currency.
It is generally difficult to buy large amounts of renminbi
from underground money changers in Hong Kong, since they don’t have
huge reserves in hand. The owners of many foreign exchange outlets in
Hong Kong report that in the past two months, demand for the renminbi
has jumped 20%.
In 2011, the renminbi appreciated by close to 5% against the US dollar.
Hong Kong banks were reluctant to offer higher interest rates for
renminbi deposits due to the rules on renminbi trading and the limited
use for renminbi deposits within Hong Kong’s banking system. This year,
however, the scope for the use of renminbi has expanded considerably
and banks have begun to scramble for deposits, leading to rising demand
for renminbi in the market.
The Guangzhou Daily reports that major Hong Kong banks are soliciting
renminbi deposits, raising the annual interest rate for renminbi deposits
to around 3%, and are vying for renminbi wealth management products.
The Bank of China, for instance, is selling a wealth management product
with a two-month term which boasts yield rate of 3.9%, compared with
the meager 0.2% annual interest rate for one-year Hong Kong dollar
deposits... More>
