Settling trade in yuan to start soon

ABOUT 400 enterprises on the Chinese mainland have been selected to participate in the yuan cross-border trade settlement pilot program, Hong Kong's Under Secretary for Financial Services and the Treasury Julia Leung said.

Speaking on a radio talk show in Hong Kong on Saturday, Leung said firms in the city would soon be able to settle trade in yuan through banks with selected companies on the mainland.

Noting the program can reduce the risks and costs arising from fluctuations in exchange rates, she said Hong Kong banks could also expand their yuan services to enterprises.

When asked whether the scheme includes trade financing, Leung said authorities on the Chinese mainland would announce the details soon.

She said the Hong Kong Monetary Authority is fully prepared for the program, including conducting tests on the yuan clearing system. She added "the system can start operations once the Chinese mainland comes up with the operational details."

When asked whether Hong Kong would change its linked exchange rate with the United States dollar, Leung said the system has been working effectively and there are no plans to change it.