About 300 Guangdong enterprises and 100 Shanghai enterprises have been selected to participate in the renminbi cross-border trade settlement pilot programme, Under Secretary for Financial Services & the Treasury Julia Leung says.

Speaking on a radio talk show this morning, Ms Leung said enterprises in Hong Kong will soon be able to settle trades in renminbi through the banks with the selected Mainland companies.

Noting the programme can reduce the risks and cost arising from fluctuations in exchange rates, she said Hong Kong banks can expand extensively their renminbi services from individual clients to enterprises.

When asked whether the scheme includes trade financing, Ms Leung said Mainland authorities will announce the details soon.

"The Monetary Authority has made full preparation for the programme including conducting tests on the renminbi clearing system. The system can commence operation once the relevant Mainland authorities have come up with the operational details."

Noting the renminbi has the potential to become an international currency and a reserve currency, she said it still has a long way to go.

When asked whether the Government will change Hong Kong's linked exchange rate with the US dollar, the under secretary said the system has been working effectively and the Government has no plan to change it.