Hong Kong Chief Executive Donald Tsang on Thursday said Hong Kong is ready for RMB trade settlements which can help the city open up new business and enable greater security for enterprises.

Speaking at a press briefing on Thursday, Tsang welcomed the State Council's decision on Wednesday about introducing a pilot program for using RMB for cross-border trade settlements.

Five Mainland cities -- Shanghai, Guangzhou, Shenzhen, Dongguan and Zhuhai have been designated for the purpose. Tsang said the move will facilitate Hong Kong as a regional RMB clearing center and underpin the city's position as an international financial hub.

"We, in Hong Kong, have completed the necessary technical preparations for becoming the first place outside the Mainland to benefit from the scheme," he said. The scheme, covering import, export and re-export, will commence once the relevant Mainland authorities have come up with the operational details.

Tsang said the initiative will bring about new business for Hong Kong's banking sector, which is expected to provide a wider range of RMB services, and enable enterprises to manage flexibly and thus reduce the risks arising from fluctuations in exchange rate.

"The scheme will enhance the diversity of RMB assets in the Hong Kong banking system, increase the local capital liquidity of the yuan, and bolster the RMB clearing platform in Hong Kong," he said.