Last month’s devaluation of the yuan by the People’s Bank of China has left a ripple effect across the globe, with markets convulsing in reaction to the currency’s weakening.

Against the US dollar, the yuan lost more than three percent in August, marking its sharpest decline in two decades. Pundits have vastly differing opinions on the long-term effects of the PBOC’s decision, but what does it mean for Hong Kong?

For now, the bumpy stock market in the Mainland was the most visible result, with lingering fears from investors. The volatility of the Chinese market as well as the devaluation present business opportunities for Hong Kong, though, as the financial services industry stands to benefit from mainland Chinese looking to move their cash. A maximum of US$50,000 is the annual limit for transferring foreign currency.

One of the cited factors in the yuan’s devaluation is the question of exports, with a view that China is looking to boost sagging exports with a devaluation that will prompt export growth. With this in mind, this would benefit Hong Kong because of the exports coming through the city.

Another ponderance is whether the Hong Kong dollar will depeg from the US dollar, an ongoing conversation since its setup in 1983, but that seems highly unlikely in the near term. It is yet far too early for the Hong Kong dollar to peg itself to the yuan, which has generally been reiterated by bankers, analysts and experts in the region, as the yuan is not yet freely convertible.

As the yuan is not yet included in the International Monetary Fund’s Special Drawing Rights basket, and the devaluation does not necessarily impact China’s push to secure its status as a reserve currency, it has yet to have a direct implication upon the HKD.

To keep the money market stable, the Hong Kong Monetary Authority (HKMA) have spent trillions from the Exchange Fund to defend the peg. They have also bought US$1.2 billion, to maintain the stability of the HKD.

Hong Kong is now caught in the tide of dual currency changes, with US monetary policy potentially tightening and the Chinese economy’s slowdown and regulatory moves.

The real estate sector in Hong Kong will likely be the one to feel the depreciation most keenly, as the foreign exchange debt is high. Another trend to watch is the impact the devalued currency has on retail rents in Hong Kong, with constant pressure from global brands to reduce rent as a more accurate reflection of mainland spending patterns. Mainland visitors spending in the retail sector accounted for 38 percent of last year’s total sales, but sales figures this year may decline, with weaker currencies in other tourist desti-nations such as Europe and Japan. The long-term implications of the past month’s movements remain to be seen, but for now, as the mainland’s top cross-border credi-tor, the HKMA will have to continue to defend the peg by selling and buying currency to keep it within its upper limit. More interventions are likely to come, but it remains to be seen whether the US Federal Reserve will raise interest rates this month. For now, it is merely a “wait and see” game.