Jun 02, 2021 07:48 PM

Chart of the Day: Hong Kong’s Yuan Deposits Grow on Appreciation-Induced Attraction

Yuan deposits in Hong Kong rose to the second-highest level in about five years in April, boosted by the currency’s appreciation against the U.S. dollar and the growing internationalization of the yuan.

The deposits denominated in the yuan in Hong Kong, a major offshore market for the Chinese currency also known as the renminbi, rose to 782 billion yuan ($122.6 billion) at the end of April, the second-highest level since February 2016 after January’s 798 billion yuan, according to data released Monday by the Hong Kong Monetary Authority, the city’s de facto central bank.


The yuan surged to a fresh three-year high against the greenback last week, which has made yuan-denominated assets more appealing to yield-hungry global investors in the post-pandemic era.

The currency’s appreciation is being driven mainly by the weakening dollar, although confidence in the Chinese economy and the economic outlook are also attracting strong fund inflows from international investors, analysts say.

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Another factor that has driven up yuan deposits in Hong Kong could be the internationalization of the yuan.

The development of the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) has added to efforts of making the yuan a global currency, according to an April 13 survey issued by Standard Chartered Bank (Hong Kong) Ltd. and the Hong Kong Trade Development Council. About one in five of 1,000 companies operating in the GBA have used the yuan for settling international trade, according to the survey.

The HKMA noted that changes in yuan deposits are affected by a wide range of factors, such as interest rate movements and fundraising activities, so it is more appropriate to observe longer-term trends.

Contact reporter Luo Meihan (

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