RETAIL | Staff Reporter, Hong Kong

RMB depreciation could further dampen retail sales

As if they aren't sluggish already.

It is believed that any meaningful depreciation of RMB could further dampen HK retail sales, as Mainland visitors' spending represented 35% of HK's total retail sales in 2015.

According to a research note from Bank of America Merrill Lynch, this is compared to the below 20% prior to 2008.

A weaker RMB may diminish the spending power of Mainland Chinese, thus putting pressure on their appetite to shop in HK.

A caveat is that if a substantial depreciation of the RMB discourages traveling abroad, higher onshore consumption may help HK developers with substantial retail assets in China.

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