The Central Government has given in-principle approval to extend the scope of RMB business in Hong Kong, Chief Executive Donald Tsang says.

In his Policy Address today he said the Central Government attaches great importance to the role of Hong Kong as an international financial centre. The successful opening of four areas of RMB business to Hong Kong banks has seen a steady rise in RMB deposits, smooth transactions and a stable exchange rate.

The enhancement includes raising the exchange limit between RMB and Hong Kong dollar per person per transaction; lifting the credit limit of RMB cards issued by banks in Hong Kong; relaxing the RMB remittance limit imposed on Hong Kong residents; extending RMB settlement to designated merchants in more sectors; and permitting designated merchants in Hong Kong to open RMB cash deposits accounts and exchange the RMB deposits one-way into Hong Kong dollars.

"The Central Authorities have also endorsed in principle the operation of a new RMB business in Hong Kong, which will allow Hong Kong residents to issue RMB cheques for a limited amount exclusively for consumer spending within Guangdong Province," Mr Tsang said.

"The Central Authorities will soon finalise the arrangements and make an official announcement. I believe these new measures will definitely be an important impetus to the comprehensive development of the financial sector in Hong Kong."