Ex-Head of Hong Kong Monetary Authority Backs Using Yuan to Invest in Hang Seng Index Stocks
What’s new: Joseph Yam, a former chief executive of the Hong Kong Monetary Authority, the city’s de facto central bank, said authorities can consider introducing the yuan for quotation, trading and clearing of stocks covered by the benchmark Hang Seng Index (HSI).
Yam, now a member of Hong Kong’s Executive Council, the region’s cabinet, told a press conference (link in Chinese) Monday that such use of the yuan could advance the currency’s internationalization, consolidating Hong Kong’s status as a global financial hub.
He said the stock market can introduce the yuan services alongside those offered in the Hong Kong dollar, and allow investors to choose their trading currency. This won’t affect the status of the Hong Kong dollar, Yam said.
Yam, a longtime supporter of expanding the use of the yuan in Hong Kong, said the best way to promote the internationalization of the currency is to advance its use in offshore capital markets. He said Hong Kong should study how to let capital flow smoothly between the region’s financial system and that of the Chinese mainland.
The background: Launched in 1969, the HSI is a major indicator for Hong Kong’s stock market. The 58 companies monitored by the index issue the largest and most liquid stocks listed on the main board of the city’s bourse.
Quick Takes are condensed versions of China-related stories for fast news you can use. To read the full story in Chinese, click here.
Contact reporter Zhang Yukun (firstname.lastname@example.org) and editor Joshua Dummer (email@example.com)
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