Li Haiying, Managing Director of the RMB business of the Bank of China (HK), stated that global efforts to "de-dollarize" and explore local currency settlements present significant opportunities for the use of the RMB.
She noted that the financing cost advantage of the RMB is becoming increasingly evident due to the interest rate differential of approximately 3% between China and the U.S. Following potential interest rate cuts in the U.S., this differential is expected to persist, encouraging more multinational companies to opt for RMB financing to replace higher-interest dollar loans, thereby reducing financing costs.
Speaking at a forum on RMB internationalization, Li emphasized that Hong Kong can play a greater role in this process. She suggested also enriching RMB-denominated investment products. Additionally, she highlighted the need for enhanced currency cooperation with regions like ASEAN and the Middle East to provide RMB liquidity and mature market mechanisms for regional offshore markets.
Looking ahead, Li advocated for policies that facilitate the use of RMB in foreign trade and investment, promoting a stable and orderly opening of mainland financial markets. She called for increased policy transparency, a wider range of risk hedging tools, and the effective use of mechanisms like currency swaps and RMB clearing arrangements to support the healthy development of the offshore RMB market.
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