Yuan conversion cap lift on hold

China has no timetable on lifting the 20,000 yuan (HK$25,496) daily conversion cap for Hong Kong residents.mini storage The news came as Chief Executive Leung Chun-ying and Secretary for Financial Services and the Treasury Ceajer Chan Ka-keung visited heads of four key government financial institutions in Beijing yesterday. They met China Securities Regulatory Commission chief Xiao Gang and People's Bank of China governor Zhou Xiaochuan along with bosses of the Industrial and Commercial Bank of China (1398) and the Bank of China (3988). It was widely expected the 20,000 yuan cap would go after Hong Kong Monetary Authority chief Norman Chan Tak-lam made the request last week in Beijing. However, Ceajer Chan said: ``The central bank's attitude towards the scrap is positive and a study of the operation will start very soon. There is no timetable for lifting the limit yet.'' Leung said he knew Hong Kong residents were looking 迷你倉orward to the liberalization and he would try to achieve it. Wing Lung Bank treasurer Siu Kai- hung said the PBoC may need to study the possible loosening of the daily cap, which might not be lifted all at once. ``Though the local yuan pool is much larger than other places, in the long term more [yuan denominated] products have to be launched,'' Siu said. Raymond Yeung Yu-ting, senior economist at ANZ Banking, said the lifting of the cap would encourage more people to use yuan rather than the Hong Kong dollar. Law Ka-chung, chief economist and strategist at the Hong Kong branch of Bank of Communicationse expected the central government to gradually loosen the cap in line with liberalization of the yuan and interest rate regimes. It is believed Beijing fears scrapping the limit may spark capital flight since individual residents now convert the currency from the onshore yuan market. gary.chau@singtaonewscorp.com 文件倉