HONG KONG, Jan. 31 (Xinhua) -- Hong Kong's offshore Renminbi (RMB) deposits, excluding Certificate of Deposits (CDs), could account for over 25 percent of total deposits in the city by 2015, making RMB deposits the second-largest source of deposits in Hong Kong, Hang Seng Bank said in a report Thursday.
Chief Economist of Hang Seng Bank Joanne Yim, the writer of the report, said that the RMB looks set to gain importance in the global economy and Hong Kong stands to benefit as an offshore RMB center.
She said the RMB exchange rate is expected to maintain a slightly firmer position against the US dollar in 2013, with expectations of a rebound in the Mainland's exports and the resulting trade surplus.
The PBOC's USD/RMB mid-rate is likely to be near 6.20 by the end of 2013, representing an appreciation of 1.4 percent for the RMB compared with the end of 2012, she added.
As for offshore RMB deposit, she said Hong Kong's offshore RMB deposit pool, excluding CDs, could grow at a faster pace, reflecting an expected rebound in cross-border trade settlement flows and potentially higher deposit interest rates as banks compete for RMB deposits.
As a result, RMB deposits could account for over 25 percent of total deposits in Hong Kong by 2015, from less than 10 percent at the end of 2012. This will make RMB deposits the second-largest source of deposits in Hong Kong, replacing the position long held by US dollar deposits.
In addition, with the RMB gaining increasing acceptance globally, more companies will choose to settle their cross-border trade in RMB.
"The amount of cross-border trade settlement in RMB could grow by about 20 percent in 2013, faster than Hong Kong's total trade flows with the Mainland," the report said.
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