Hong Kong's offshore renminbi (RMB) business will benefit from the International Monetary Fund (IMF)'s decision to include yuan in its Special Drawing Rights (SDR) basket, Secretary for Financial Services and the Treasury of Hong Kong Special Administrative Region government K C Chan said here on Tuesday.
The inclusion will be a very important milestone in the currency's internationalization process, as it means more acceptance of the renminbi as a trading and investment currency, Chan told Xinhua in an exclusive interview.
The IMF has formally announced that the renminbi will join the SDR, following the U.S. dollar, the euro, the the British pound and the Japanese yen as the fifth SDR basket currency.
Chan said the measure will also increase demand for the renminbi offshore products in Hong Kong and boost development of Hong Kong's offshore renminbi market.
Besides Hong Kong, the renminbi business in Singapore, London, Frankfurt and some other places also recorded rapid growth in recent years, bringing more and more competition in future.
Chan said it is good to have competition, but Hong Kong has a unique advantage that can not be replaced by other rivals.
"As an international financial center, Hong Kong holds a prominent position compared to the mainland market, while to the overseas market, Hong Kong enjoys close economic and trade ties with the Chinese mainland," he said.
The HKSAR government conducted a series of overseas roadshows in the last few years to promote Hong Kong's advantages as an offshore renminbi center.
Chan said a new round of roadshows will be launched later, with the renminbi included in SDR as highlight.
The proposal on the China's 13th Five-Year Plan (2016-2020) mentioned support for Hong Kong to remain as a global financial center and a key offshore renminbi hub.
Chan said, in order to cooperate with the policy, Hong Kong needs to develop more renminbi products to further widen the investment channels between onshore and offshore markets, and improve the transaction efficiency of renminbi trading platforms.
"Hong Kong should seize the historic opportunity and continue to play a pivotal role of bridgehead and financial hub in the process of China's opening up its financial markets and renminbi internationalization," he said.
