Hong Kong firms more confident in yuan than other currencies

Stability of yuan's value and market demand are among the reasons for firms' confidence on the currency.

Entrepreneurs in Hong Kong have more confidence in the Chinese currency, the renminbi or yuan, than other currencies such as the Hong Kong dollar, the U.S. dollar and the euro, according to a report released on Tuesday.

The report by Grant Thornton China, a famous international accounting firm, shows 80 percent of the interviewed private enterprises said they are "confident" or "very confident" of the yuan, while only 24 percent of companies said they have confidence in the U.S. dollar and 18 percent in the euro.

The business sector's faith in a currency is closely related to many factors, such as the stability of its value, market demand, liquidity condition, and confidence in money issuers.

Xu Hua, president of Grant Thornton, said that recent measures to boost the cross-border use of the yuan would facilitate the development of a renminbi offshore market in Hong Kong.

The yuan will become one of the most trustworthy currencies in Hong Kong as its value keeps appreciating against the Hong Kong dollar, which is linked to the greenback at an exchange rate around 7.75 Hong Kong dollars for per U.S. dollar, said the report.

According to the Hong Kong Monetary Authority (HKMA), the yuan-denominated deposits in Hong Kong amounted to more than 550 billion (86.1 billion U.S. dollars) at the end of June, 75 percent higher than at the end of 2010.

The full story is available at Xinhua News.