AN increasing number of Hong Kong residents are choosing to exchange Hong Kong dollars into yuan and deposit the money in Shenzhen banks after China s central bank increased interest rates four times since October.
Hong Kong residents exchanged Hong Kong dollars into yuan at currency exchanges and deposit them in banks near checkpoints in Shenzhen, Southern Metropolis Daily reported Thursday.
The exchange rate of the Hong Kong dollar to Chinese yuan has been falling, said an unidentified clerk at a currency exchange.
He said in the past HK people usually exchanged HK$1,000 (US$129) but they were now exchanging at least HK$10,000 at a time.
Chen, a Hong Kong resident who was making deposits for his son, told the Daily that he began yuan deposits in Shenzhen last year.
The yuan has more potential in value appreciation than the Hong Kong dollar, said Chen. Hong Kong banks also provide yuan deposits but the interest rate is lower than mainland banks.
Hong Kong residents can open accounts at mainland banks with valid Hong Kong ID cards or passports.
We have seen increasing numbers of Hong Kong residents coming to Shenzhen for yuan deposits, said an unidentified clerk with Bank of China.
On Wednesday, benchmark one-year deposit rates rose by 25 basis points to 3.25 percent and one-year lending rates rose by 25 basis points to 6.31 percent, the People s Bank of China said in a statement on its Web site.
The benchmark one-year deposit rate in Hong Kong banks is only 0.55 percent, according to data from the Bank of East Asia.
(Tina Chen)
