HONG KONG - The amount of cross-border yuan trade settlement grew rapidly in 2010, with the pool of offshore yuan funds in Hong Kong reaching a level to meet local demands, said Secretary for Financial Services and the Treasury of the Hong Kong government KC Chan on Wednesday.

Last year, yuan trade settlement in Hong Kong grew from a monthly average of 4 billion yuan ($610 billion million) in the first six months, to 30 billion yuan per month from August to September, and then to 68 billion yuan in October, Chan said.

"There was good development of offshore renminbi (RMB) business in Hong Kong in 2010. Renminbi financing activities became more active, especially after the expansion of the renminbi trade settlement scheme in June and the amendment to the RMB Clearing Agreement in July 2010," Chan said while addressing the city's legislative council meeting.

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As cross-border trade settlement in yuan expands and deepens, yuan payments from the mainland to Hong Kong will continue to increase and funds so accumulated will become the major source of supply in the local renminbi market, Chan said.

Data showed that for the first 11 months last year cross-border trade payment from the mainland to Hong Kong amounted to 180 billion yuan while payments from Hong Kong to the mainland topped 50 billion yuan.

Under such circumstances, renminbi deposits in Hong Kong increased steadily to about 280 billion yuan at the end of November last year.

"The pool of offshore yuan funds in Hong Kong has reached a level that is adequate to meet the demand from local firms," Chan said.

Chan also noticed that the amount of yuan bonds issued last year exceeded 30 billion yuan, with issuers including local and multinational firms as well as international financial institutions such as the Asian Development Bank.