Such fall has been partly undone and is expected to continue to do so over the projection horizon. Trend growth projections are the same as in the previous Monetary Policy Report, that is, between 4.0% and 4.5% in the next two years. Beyond the projection horizon, a gradual return to trend growth figures approaching 5% is expected, to the extent that investment recovers and the general cost structure of the economy continues to reflect the lower energy costs. Annual CPI inflation has been negative since August, and the Board estimates it will become positive over the course of the first half of 2010 and will gradually converge to 3% in the monetary policy horizon, this time the last quarter of 2011. The progressive – yet incomplete – closing of the output gap that is expected in the projection horizon, together with higher commodity prices, explain headline inflation increasing faster than the core measures. Y-o-y changes in CPIX and CPIX1 will stay flat in negative figures for some months longer than CPI, and will converge to 3% later than headline inflation (table 3). Market inflation expectations remain at 3% in the medium term, despite low inflation expected for the next few months (figure 14). Several factors determine inflation’s convergence to the target. In particular, this projection relies on the external scenario steadily adding a boost to economic activity, with the recovering of confidence and global financial conditions gradually normalizing and allowing domestic and international demand to pick up.
Norman T L Chan: Removal of RMB conversion limit for Hong Kong residents Speech by Mr Norman T L Chan, Chief Executive of the Hong Kong Monetary Authority, Hong Kong, 12 November 2014. *  *  *  I am glad to announce that the RMB conversion limit for Hong Kong residents of RMB20,000 per day will no longer be applicable with effect from 17 November 2014. Under the new arrangement, banks will square their positions arising from RMB conversions conducted with Hong Kong residents in the offshore market instead of the onshore market. As a result, the prevailing conversion and other relevant restrictions for onshore conversion will hence be no longer applicable. The HKMA has just issued a circular to banks setting out the detailed arrangements. The HKMA has had many rounds of discussions with the banking industry and Mainland authorities on relaxing the restrictions on RMB currency conversions by Hong Kong residents. We consider that the best option is for RMB conversions by Hong Kong residents to be done in the offshore market instead of the onshore market. With the size of the offshore RMB liquidity pool in Hong Kong exceeding RMB 1 trillion, and considering the scale and depth of the RMB foreign exchange market, we do not foresee any problem for banks to square their positions for Hong Kong residents’ RMB conversions in the offshore market.