Secretary for Financial Services and the Treasury, Christopher Hui, on Friday said the government would explore more ways in which the renminbi could be used to handle payments.

This, he added, was a "natural" process to promote the use of the national currency, while serving as a way to hedge against exchange rate-related risks.

On Wednesday, Chief Executive John Lee announced in his Policy Address that the government would further promote the use and globalisation of the yuan.

Speaking to reporters, Hui said government had already been taking in renminbi via different channels such as the issuance of yuan-denominated bonds.

Authorities were also pressing ahead with plans to allow residents to use renminbi to pay for stock stamp duties, and include RMB counters under the Southbound Stock Connect Scheme to encourage more renminbi transactions, he added.

"So you see, in terms of the recipient side, the government has already been collecting, and will collect more of the renminbi via different scenarios.

"And that's why we also need to explore more use cases to spend the renbminbi, so we'll not need to consider about issues related to exchange rates, such as the rate-matching issues," he said.

Hui added the government would look into scenarios, such as using the renminbi to handle payments on projects related to water imports, or training sessions if it involves mainland institutions.

"Actually we have been doing that, it's just that the amount involved might not be very large.

"So from my perspective, I think it's about making a balance between the receivables and payables. And it's a natural and logical process," he added.

Hui also said the Hong Kong Exchanges and Clearing would announce details this year of new renminbi-denominated, physically settled gold futures contracts, as investors increasingly seek more diversified products.

Apart from settling government payments in yuan for mainland services, the government would also expand financial services using the yuan, including for short-term financing needs, according to the Policy Address.

The Hong Kong Monetary Authority will also link the Faster Payment System (FPS) with UnionPay, allowing people to make purchases in yuan.




Edited by Tony Sabine