New measures may boost Hong Kong RMB trade

China plans to introduce new measures to boost the flow of renminbi between Hong Kong and the mainland, including potentially relaxing the RMB20,000 (US$3,142) daily conversion limit for Hong Kong residents, The Wall Street Journal reported, quoting people familiar with the matter. The policies will be announced during President Hu Jintao’s three-day visit to Hong Kong, which begins on Friday, the people said. One source said Beijing may expand the Renminbi Qualified Foreign Institutional Investor program, which allows foreign investors to use renminbi raised offshore to buy Chinese securities. The move would mark another step by Beijing to internationalize its currency, as well as strengthen Hong Kong’s role as an offshore yuan trading center. Yuan deposits in Hong Kong fell to RMB552.4 billion at the end of April from a high of RMB627.3 billion in November last year as high expectations for currency appreciation have faded.