BOC Hong Kong to raise renminbi deposit rates

Will offer higher rates to peer banks.

BOC Hong Kong (Holdings) Ltd said it plans to increase its offered rates for other lenders' renminbi deposits in the bank from 0.648% to at least 0.75%. Sources said the new offered rates range from 0.75% to 1.05% depending on the amount of renminbi deposits a bank has in BOC Hong Kong. There is a threshold of US$16.3 million for the highest interest rate effective July 1.

The bank believes its rate hike could help further enhance Hong Kong competitiveness as an offshore renminbi center and hopes it will help attract more deposits to Hong Kong.

Analysts said the move is part of the bank’s bid to strengthen Hong Kong’s role as an offshore renminbi hub. Hong Kong is seeing stiffer competition from other offshore renminbi centers. Singapore and Taiwan have begun renminbi-clearing arrangements with China over the last few months. China last week struck a deal over the weekend with the Bank of England for a currency swap line.