Recently, demand for the yuan, the official currency of the People’s Republic of China, has lifted. But Ip Sio Kai, president of The Macau Association of Banks (ABM) and incumbent lawmaker, is unsure as to why.
The ABM president admitted that there has recently been a shortage of the currency in Macau, with a sudden hike in demand meaning that supply is unable to catch up. The situation is abnormal, the association head pointed out.
A report by local Chinese media outlet Exmoo disclosed that its readers have recently contacted them regarding the situation. Exmoo was told that some readers were declined by several banks when attempting to exchange patacas for 5,000 yuan. The readers were told that the maximum exchangeable amount for patacas was 2,000 yuan, forcing them to perform the exchange in Zhuhai instead.
The Chinese media outlet said its staff attempted to exchange money themselves. Journalists approached a currency exchange booth near the Border Gate to exchange Macau patacas for yuan. The shopkeeper was reluctant, according to the report.
It was disclosed that many currency exchange shops are eating into the Chinese yuan reserves that they kept from before the pandemic. “Once finished with the money, there will be none,” a shopkeeper told the Chinese media outlet.
On the other hand, it was claimed online that people were taking yuan in cash from Macau to sell in Zhuhai.
After nearly half a year of strict border restrictions that included mandatory quarantine, health checks upon arrival and even entry bans, these measures were lifted about two weeks ago by the central government in Beijing.
With a valid Covid-19 nucleic acid test result and an appropriate travel history, people from Macau and the mainland can resume interactions at the border.
With travel restrictions easing, many Macau residents are eager to return to travelling throughout the mainland. It is unclear, however, whether this has caused the recent lift in demand and the subsequent shortage of yuan.
Although mainland residents are more used to conducting retail transactions with mobile payment methods, such methods, even if available in Macau, have not gained as much popularity.
Ip attributed the shortage of the yuan in Macau to the half-a-year shortage of visitors from the mainland.
He explained that under normal circumstances, the supply of the yuan in Macau relies on visitors from the mainland. He did not explain, however, with Alipay and WeChat Pay widely accepted in Macau, and given mainland residents have a habit of using cashless payment facilities, why these visitors still account for a major part of yuan inflows.
Ip agrees that cashless mobile payments have become a common practice on the mainland. In his opinion, the demand for cash will decline because of this trend.
Anthony Lam
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