Central Bank Halt RMB Loans Abroad

Reporters learned from the banking industry that the people's Bank of China temporarily suspended foreign yuan recently.

The balance of RMB loans in Hongkong has increased by nearly 5 times in the past six months.

Since the beginning of this year, because the central bank has implemented a tight monetary policy, the interest rate of commercial banks has been rising all the way. At present, the benchmark lending rate for one year is 6.56%, but the actual loan interest rate is usually higher than this level.

At the same time, the interest rate of RMB loans abroad is relatively low. Taking Hongkong as an example, the interest rate of RMB loans at the beginning of the year is less than 2%. At present, interest rate prices have risen, but it is only 3%-5% level, which is still much lower than the benchmark lending rate of domestic commercial banks.

Therefore, some enterprises have chosen the guaranty letter from domestic banks to provide guarantees, and the "internal guarantee loan" mode of obtaining RMB loans from overseas banks. This is the central bank's stop business.

People in the banking industry told reporters that the central bank's move was mainly to prevent the rapid growth of foreign Renminbi loans to the domestic Renminbi loan market.

Data from the Hongkong monetary authority show that although Hongkong's renminbi loan business started relatively slowly, it started gradually in the past six months. The balance of bank loans to customers from the beginning of this year was less than 2 billion yuan, to 11 billion yuan at the end of June, and its growth rate was nearly 5 times.

Although it is not yet clear how much of the growth loans will be used for mainland enterprises, there are indeed many Renminbi loans flowing into the mainland.

"Although the impact on the domestic credit market is very small now, it is not ruled out that the future may affect the central bank's monetary policy and society.

Or affect the use of offshore RMB funds

The industry insiders said that stopping the "internal guarantee" business does not mean stopping domestic enterprises issuing Renminbi debt to Hongkong, and domestic enterprises with financing needs can still choose to make financing in the form of issuing RMB bonds in Hongkong.

In addition, "internal loan" is also suspended, but I do not know when to restart.

Because the financing cost of issuing RMB bonds in Hongkong is relatively low, it has also become a new financing channel for some domestic enterprises.

Data show that between 1 and June this year, a total of 38 institutions issued 42 billion 700 million yuan of RMB bonds in Hongkong. Compared to the rapidly growing Renminbi deposits in Hongkong, the issuance scale of RMB bonds is still small, but this has exceeded the 16 yuan issued by the 16 institutions in 2010.

With the development of RMB cross-border trade settlement, RMB deposits in Hongkong increased from 56 billion 100 million yuan at the end of 2008 to 550 billion yuan at the end of 6 in 2011, and 235 billion yuan in the first 6 months of 2011.

The industry expects that at this rate, Hongkong's renminbi deposits are expected to exceed trillion yuan at the end of the year.

Although Renminbi deposits are growing rapidly, the available channels are still limited.

Buying Renminbi bonds is one of the forms, and vigorously developing Renminbi loan business is another way.

The banking industry insiders said that the ban on the central bank would have a certain impact on the use of Renminbi funds which were not too many options in Hongkong.

If RMB funds can not be used or limited in Hongkong, it is bound to affect the establishment and further development of the offshore RMB market.