The England international goalkeeper is currently on a season-long loan deal with Blues but Hughes has played down talk that the transfer could be made permanent at the end of the season.
"We allowed Joe to go because we felt it was important that he played regular football," said Hughes.
"He was frustrated to lose his place when Shay came but we have huge regard for his ability.
"We felt it was important for him to continue to develop and improve.
"He wasn't going to do that outside the first-team here, so we decided the best course of action was to let him get some experience elsewhere.
"But our view on Joe has not changed.
"He is an outstanding 'keeper and we are pleased that he is a Manchester City player."