Macao gets green light for RMB services
By Bing Lan (China Daily)
Updated: 2004-08-05 09:36



Macao and mainland banking officials yesterday signed an agreement which will allow the special administrative region to launch renminbi business.

The memorandum was signed in Macao yesterday by People's Bank of China Vice-Governor Li Ruogu and Macao Monetary Authority Chairman Teng Lin Seng.

The nation's central bank has also pledged to provide all necessary services to Macao commercial banks approved to provide yuan-denominated services.

The move is aimed to meet the need generated by growing cross-border travel and business exchange between the Chinese mainland and the region, which returned to the motherland in 1999.

The central bank said it will "provide a clearing channel and mechanism for banks in Macao to conduct personal renminbi business."

The central bank said it would consult with the Macao Monetary Authority and designate a clearing bank for the purpose.

Macao commercial banks operating yuan business will be allowed to provide deposits, remittance, credit card and exchange services for local residents. But they cannot provide yuan-based loans.

The central bank's statement devoted special attention to the implications that yesterday's agreement will have on the region's gambling industry, a mainstay of the local economy.

Although mainland residents will be able to use renminbi-based credit cards in Macao when local banks can provide yuan services, these credit cards cannot be used in casinos.

In addition, mainland residents can only withdraw less than 6,000 yuan (US$720) when they travel overseas.

So the change "will not encourage mainland people to gamble in Macao," the statement said.

The arrangement between the central bank and the Macao Monetary Authority is similar to the one made earlier this year between the mainland and Hong Kong, whose commercial banks started to conduct yuan-denominated business earlier this year.

BOC Hong Kong Holdings Ltd, the Beijing-based Bank of China's Hong Kong subsidiary, is the clearing bank for this.

But it remains unclear who will become Macao's clearing bank. The statement did not specify when yuan-denominated business will be officially launched in Macao.

Yesterday's agreement will provide an official channel for renminbi banknotes circulating in the region to flow back to the mainland.

The yuan is becoming increasingly popular in Macao after the handover in 1999.

It was used well before 1999 in places like gold shops, said Wan Sin Long, director of the Banking Supervision Department at the Monetary Authority of Macao.

Now it is being used anywhere, such as department stores and taxis, he said.

The renminbi is fully convertible under the current account, but only partly convertible under the capital account.

Although the annual inflow of renminbi banknotes, as recorded by conversion into the local currency, the pataca, is estimated at only 2-3 billion yuan (US$240-360 million), tiny as compared to the figure in Hong Kong, the volume is expected to increase as cross-border travel and business exchanges with the mainland grow, Wan said.

Allowing Macao banks to conduct renminbi business will not only facilitate exchanges between the two sides, but strengthen banking supervision and protect the reputation of renminbi, Wan said.

Underground money exchange is now an everyday scene in Macao. So the move to bring this money into official channels will crack down on these illegal dealings.

www.chinaview.cn 2004-08-04 18:20:57

MACAO, Aug. 4 -- Macao banks will be allowed to start offering local personal Renminbi (RMB) services in October, according to a memorandum signed here between the People's Bank ofChina (PBOC) and the Macao Monetary Authority on Wednesday.

  Based on the memorandum signed by Li Ruogu, vice governor of PBOC and Anselmo Teng, president of the Macao Monetary Authority, local banks in Macao can provide deposit, remittance, exchange andcredit card services of RMB.

The authorization will make Macao the second place after Hong Kong to offer an official channel for RMB notes circulating outside China's mainland.

Li Ruogu said after the inking of the memorandum that PBOC willtreat Macao on an equal status with Hong Kong in the RMB dealing. All articles and regulations on the personal RMB services to be enacted in Macao are basically in common with those applied in Hong Kong, which was allowed to launch the services on Feb. 25 this year.

Li said that the economic environment in Hong Kong and Macao isdifferent. He warned the authorities to resort to strong monitoring measures against money laundering after the launch of the personal RMB services in Macao, whose economy is heavily dependent on the characteristic business of the gaming industry.

"The smooth business of the RMB services in Hong Kong has givenus a confidence of expanding the RMB circulation to Macao," said Li.

The central bank official said that PBOC will take in applications for overtaking RMB clearing business in Macao, and through negotiations with the Macao Monetary Authority, PBOC will select a bank that should be experienced in handling the financialservices both in the mainland and Macao to be the clearing bank for the RMB services in Macao.

Local banks in Macao willing to participate in the RMB serviceswill need to clinch an agreement with the upcoming RMB clearing bank to be authorized by PBOC in launching the business, which is expected to take two months of time from now on.

Anselmo Teng, president of the Macao Monetary Authority said onWednesday that the launch of the RMB services in Macao will be another favorable element making for the swift economic cooperation between the mainland and Macao following a series of preferential policies including the implementation of the Mainland/Macao Closer Economic Partnership Arrangement (CEPA), the mainland's opening of individual travels to Hong Kong and Macao and the signing of the Framework Agreement on Regional Cooperation in the Pan-Pearl River Delta.

The launch of the RMB services will bring convenience for personnel flows between the mainland and Macao, which is conducivein boosting Macao's tourism, said Teng.

Macao's Chief Executive Edmund Ho Hau Wah witnessed the signingceremony of the memorandum on Wednesday. Enditem 　

The Monetary Authority today (4 Aug.) signed an agreement with the People’s Bank of China (PBOC) in the Government Headquarters, allowing local banks to run Renminbi (RMB) services.

In line with the agreement signed by President of the Macao Monetary Authority Anselmo Teng, and the Vice Governor of PBOC Li Ruogu, banks in Macao may offer four RMB services including deposit, exchange, credit card and remittance.

According to the proposal, any local bank interested in engaging RMB services will have to transfer the RMB deposit to a bank which provide RMB clearing business in Macao. The clearing bank will be selected by the PBOC.

After the handover, trade and personnel flow between the mainland and Macao increased significantly, especially after the implementations of CEPA, the Individual Travel Scheme and the Pan Pearl River Delta Cooperation. The launch of RMB services in the territory may boosting the economy and satisfy needs of the market.

Is it really a benefit?:bow:

The Macau Post Daily reported the president of the Macau Monetary Authority saying the rise in value of China’s national currency, the yuan, is expected to have a positive impact on Macau’s economy.

He said that because of the strong yuan that exports from Macau to China will be cheaper, a “collateral effect” that local businesspeople really should take advantage of and that they must take advantage of Chinese Economic Partnership Agreement (CEPA).

The president Mr. Anselmo Teng also said it was expected that the yuan was getting stronger, because of the coninued economic growth of mainland China. But he did recognize that a strong yuan would mean that Chinese products will become more expensive in Macau, and this could cause a higher inflation, which in November stood at 5.2 percent.

But on the other hand, the rising value of the yuan will benefit the local tourism industry as the purchasing power of mainland Chinese visitors will increase. “The higher value of the yuan is beneficial for Macau’s economy, which is focused on tourism,” Teng said. The exchange rate today is 1.0296 Macau patacas for 1 yuan.

Last year in 2006, more than half of the 20 million visitors to Macau came from mainland China.

Anselmo is a smart guy. Yuan rise will boost tourist visits at Macau. As they have more money to spend they will spend more. Macau’s main economy is gambling so I cannot see why could Macau lost many money.

China to Start Yuan Trade Settlements in Shanghai, Guangdong
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By Judy Chen

April 8 (Bloomberg) -- China will allow yuan settlement for international trade in Shanghai and four cities in Guangdong province to promote global use of the currency and protect companies from swings in the U.S. dollar.

The scheme will “help avoid exchange rate risks, improve the trade environment and ensure steady growth in overseas trade,” the State Council said in a statement on its Web site. The cabinet will release related regulations “as early as possible.”

China is seeking to promote the yuan as an international currency after signing 650 billion yuan ($95 billion) in swap agreements with Argentina, Indonesia, South Korea, Hong Kong, Malaysia and Belarus in the past four months. China’s yuan has gained 21 percent against the U.S. currency since a dollar peg was scrapped in 2005, eroding the value of exporters’ dollar- denominated profits.

“Using yuan in settlements will help boost bilateral trade, and shield exporters from an unstable U.S. dollar,” said Yang Shengkun, a currency analyst at China Citic Bank Co., a unit of China’s biggest state investment company. Most of China’s foreign trade is currently settled in the U.S. dollar.

The four other cities are Guangzhou, Shenzhen, Zhuhai and Dongguan. The statement didn’t say with which countries the five cities will settle trade with. Hong Kong and nations involved in the swap agreements have indicated interest in settling transactions in the currency.

The Dollar Index traded on ICE futures in New York, which tracks the currency against those of six trading partners, plunged 2.9 percent last month, the worst performance this year, on concern Federal Reserve purchases of Treasuries will boost the supply of the greenback.

China’s exports tumbled a record 25.7 percent in February, narrowing its trade surplus to $4.8 billion, the smallest in three years.

To contact the reporters on this story: Judy Chen in Shanghai at xchen45@bloomberg.net

Last Updated: April 8, 2009 06:06 EDT

Again, this is a Chinese matter not Macanese. Anyway I agree with China. Let's trade in Yuan. U.S. dollar is past.

This is very important issue for Macau

The State Council plans to launch a pilot for RMB settlement in commodities trading between Guangdong Province/Yangtze River Delta and Hong Kong/Macao, and between Guangxi Province/ Yunnan Province and ASEAN. According to insiders, PBoC has begun to deal with the issue but hasn’t finalized the decision on pilot banks.

The State Council plans, when conditions are mature, for Shanghai and Guangdong to launch a RMB settlement pilot in the trade with Hong Kong and Macao. If it is successful, the pilot may be expanded to the trade with other neighboring countries.

Why is this so important to Macau?

Why is this so important to Macau?

I think this is potentially the first step for China to convert their currency. It has global implication, not just Macau. If Mainland Chinese can freely convert their money, there is even more potential for them to invest/spend in Macau.