Chinanews, Beijing, Jan. 9 – After the value of Renminbi climbed above Hong Kong dollar in mainland banks, Renminbi's exchange rate to Hong Kong dollar also rose above 1:1 in banks in Hong Kong.

 

This shows that in retail sector, the value of Renminbi is already above the value of Hong Kong dollar. It is expected that in the inter-bank foreign exchange market, Renminbi will rise to a higher value in the near future. In the Pearl River Delta region in south China, many local shops now refuse to accept HK dollar, the China Securities Journal reported.

 

A staff worker at Bank of China's Hong Kong branch told this reporter that on January 5, the bank customers could exchange for only 99.5 yuan with every 100 Hong Kong dollars. In Hang Seng Bank, the online exchange rate of Renminbi against Hong Kong dollar broke the 1:1 exchange level and residents should pay 100.5 Hong Kong dollars in exchange for every 100 yuan. In HSBC and the Industrial and Commercial Bank of China (ICBC)'s Asia branch office, although Renminbi's exchange rate to Hong Kong dollar still kept at 1:1, staff workers in these banks said that the situation could change at any time with Renminbi expected to rise to a higher value.

 

Renminbi's rising value has already brought some psychological impacts. As Hong Kong’s economy is more closely linked with mainland economy, some market analysts worry that Renminbi's rise in value might affect the linkage system between the US dollar and the HK dollar, which has functioned in Hong Kong for 23 years. To clear up people's doubts, Hong Kong SAR government had to stress repeatedly that Hong Kong would adhere to the present linkage system between the US dollar and the HK dollar. Hong Kong Chief Executive Donald Tsang Yam-kuen stated that Hong Kong would not consider changing its current linkage system until 2047, when Renminbi could be fully exchangeable at that time.