China's central bank likely to lift yuan conversion limit for Hongkongers

The People's Bank of China is likely to scrap the 20,000 yuan-a-day limit on currency conversion for Hong Kong people, Hong Kong Monetary Authority chief executive Norman Chan Tak-lam says.

The central bank had been actively considering such a move, which would boost the development of yuan-denominated investment products in Hong Kong, Chan said in Beijing yesterday after meeting officials from the central bank and the State Administration of Foreign Exchange.

"I hope the daily conversion limit can be removed as soon as possible," he said, although no time frame had been set at the meeting.

While the limit on converting yuan into Hong Kong dollars and vice versa would be scrapped for individuals, the daily remittance limit of 80,000 yuan (HK$102,000) - which affects money transferred through banks across the border - would not change.

Chan said yuan business in Hong Kong had developed significantly in the past two to three years, with demand from individual investors for yuan-denominated products increasing.

The removal of the daily conversion limit would make it easier for individuals to buy yuan-denominated products, such as gold certificates and exchange-traded funds, he said.