China's central bank has appointed Bank of China (Hong Kong) Ltd as the clearing bank for the nation's currency, the yuan, to facilitate new personal services offered by Hong Kong banks, officials said yesterday.
Until now, there had been no official clearing service for the yuan in Hong Kong. The yuan is not a fully convertible currency and local banks here have not been able to offer any services in the currency.
Although some local busi-nesses already accept cash payments in yuan for goods purchased by visiting Chinese, they exchange the yuan back to Hong Kong dollars through unofficial channels, such as private money exchangers.
The People's Bank of China picked the Hong Kong branch of the commercial Bank of China from a list of six Hong Kong banks, the Hong Kong Monetary Authority said in a statement. The term of appointment is three years, it said.
Hong Kong's political leader, Tung Chee-hwa (
The new services will be limited to individuals, rather than allowing corporations to convert yuan into other currencies.
As the clearing bank, Bank of China (Hong Kong) Ltd will offer settlement accounts for Hong Kong banks, accepting and allowing withdrawal of yuan. It will also collect and distribute yuan banknotes and provide clearing services for remittances in yuan.
Hong Kong and China maintain separate economic and political systems.
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