Hong Kong Monetary Authority says that the issuance of Exchange Fund Bills has n


The Hong Kong Monetary Authority (HKMA) said on Wednesday it had announced that an additional HK $ 40 billion in Exchange Fund notes had nothing to do with the Hong Kong dollar movements and said there was no concern about the recent weakening of the Hong Kong dollar.

A spokesman for the HKMA said in an e-mail that the discount rate on the interest rate would prompt the Hong Kong dollar to weaken further under the linked exchange rate system. When the Hong Kong dollar weakened to 7.85 against the dollar and touched the weak exchange guarantee, there would be a outflow of funds, that is, the total balance and the increase in Hong Kong dollar interest.

"The above is a reasonable act under the linked exchange rate, which is part of the design of the linked exchange rate system," he said.

The HKMA announced earlier this month that it would issue a total of HK $ 40 billion in Exchange Fund notes. The spokesman said that the recent demand for bills was bullish, especially for liquidity management purposes.

The HKMA considers that the issuance of bills in the current market environment is appropriate because the liquidity coverage rate in the Basel III is being implemented in phases and the relevant ratios will increase to 90% and 100% respectively in 2018 and 2019, In this context, there are indications that market demand for bills remains bullish, such as the persistence of low yields and similar interest rates with similar financial instruments.

 


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