Hong Kong loosens RMB exchange curb

Hong Kong will call off the 20, 000 RMB per person per day limit of Renminbi currency conversions for local residents on November 17, when the Shanghai-Hong Kong Stock Connect launches, Hong Kong Monetary Authority (HKMA) announced on Wednesday.

Chan Tak-Lam, chief executive of the HKMA, said in a statement that having regard to the development of the offshore RMB market in Hong Kong and the launch of the Shanghai-Hong Kong Stock Connect, Authorized Institutions (AIs) may conduct RMB currency conversions with Hong Kong residents without applying limits.

Chan said, AIs should conduct position squaring for RMB conversions conducted with Hong Kong residents in the offshore market, instead of in the onshore market through the RMB clearing bank.

"The prevailing relevant restrictions, including the 20,000 RMB per person per day conversion limit, will no longer be applicable. In addition, the restrictions in relation to position squaring for RMB conversions conducted with designated business customers will no longer be applicable. Such position squaring should also be conducted by AIs in the offshore market starting from the same time," Chan added.

Hong Kong's chief executive Leung Chun-ying welcomed the HKMA's decision, saying without the limits, it would be more convenient for Hong Kong residents to participate in Shanghai-Hong Kong Stock Connect and some other RMB financial transactions.

It will promote the position of Hong Kong as a RMB offshore business center, he added.