HK sees boom in daily RMB settlements

Hong Kong's daily renminbi settlement has exceeded that of the Hong Kong dollar, according to the Hong Kong Monetary Authority, underlining the yuan's increasing internationalization.

Daily renminbi settlement through the real time gross settlement systems is at nearly 400 billion yuan ($65.6 billion).

There has been explosive growth since 2009, when the cross-border yuan settlement was first allowed.

In 2010, the daily settlement value was just 5 billion yuan. But it soared to 120 billion yuan in 2011 and then to 210 billion yuan in 2012.

"The Hong Kong dollar is the official currency in Hong Kong. So this indeed is extraordinary," Norman Chan Tak-lam, chief executive of the HKMA, noted at a Friday media briefing in Beijing.

In addition, the cross-border settlement between Hong Kong and the Chinese mainland accounted for only 10 percent of the 400 billion yuan daily renminbi settlement, with 90 percent being "purely offshore", meaning most of it is occurring either between Hong Kong and overseas markets or among overseas markets via Hong Kong.

Although it was only 10 percent of the total deal volume, the cross-border trade settlement still reached 2.3 trillion yuan in the January-August period, up more than 30 percent over the same time last year.

As more and more Chinese companies conduct renminbi settlement in Hong Kong, the city's renminbi pool has grown rapidly. By the end of August, 870 billion yuan had been deposited in Hong Kong's banks.

When the city launched its offshore renminbi business four years ago, the pool was at just 60 billion yuan. That figure grew to 720 billion yuan by the end of last year, establishing the hub as the top offshore renminbi trading center.