Bank of China Raises Fees for Hong Kong Dollar Trades Sevenfold

Bank of China Ltd., the only yuan clearing bank in Hong Kong, said it raised transaction costs for conversions between the Hong Kong dollar and the yuan more than sevenfold.

Bank of China widened the spread between the cost of buying and selling Hong Kong dollars for the Chinese currency to 0.75 percentage points from 0.10 points on May 5, said Clarina Man, spokeswoman at Bank of China's Hong Kong branch.

China Foreign Exchange Trading System, the country's trading platform, increased foreign-exchange transaction fees with the Hong Kong branch of Bank of China on the same day, according to Man. She wouldn't disclose the amount of increase.

Most Hong Kong lenders said they would pass on the additional cost of converting currencies to customers, Singtao Daily reported today. Residents of the city are transferring their Hong Kong dollar deposits into the Chinese yuan to benefit from higher interest and currency appreciation, the newspaper said.