The Limited Times

Now you can see non-English news...

HKMA: If necessary, exchange US dollars to the People's Bank of China said the arrangement is one-way non-deposit and send US dollars to the Mainland

2020-06-12T10:59:11.982Z


The recent trend of the Hong Kong dollar has once again become the focus of market participants. Not only has the Hong Kong dollar clearly turned back after the National People’s Congress announced the draft of the national security law in the port area, and the hedge fund Kyle Bass, which has always been pessimistic about the prospects of China and Hong Kong, plans to


Financial News

Written by: Zhang Weilun

2020-06-12 14:50

Last update date: 2020-06-12 14:51

The recent trend of the Hong Kong dollar has once again become the focus of attention of market participants. Not only has the Hong Kong dollar clearly turned back after the National People’s Congress announced the draft of the national security law in the port area, and Kyle Bass, a hedge fund fund that has always been bearish on the prospects of China and Hong Kong, plans to raise funds to buy a bearish Hong Kong dollar. In the option method, bet will decouple the Hong Kong dollar from the US dollar in the next 18 months. Can the Hong Kong linked exchange rate system be maintained? On its Facebook page, the HKMA uses the words "capable, resourceful, and confident" to express confidence that it can maintain the contact system; it also points out that the exchange of Hong Kong dollars and US dollars with the People's Bank of China makes it necessary for the HKMA The Hong Kong dollar can be used to exchange US dollars into the PBOC, emphasizing that the arrangement is a one-way arrangement and there is no problem of the Hong Kong Monetary Authority sending the Hong Kong dollar to the Mainland.

Every time there is social turmoil, market participants naturally pay attention to the trend of the Hong Kong dollar, hoping to learn whether there is any capital outflow from Hong Kong, especially the recent increase in Singapore’s foreign currency deposits in April, which has attracted more market attention. The Monetary Authority quoted the Singapore Monetary Authority as saying that the newly added foreign currency deposits came from all over the world, not mainly from Hong Kong.

As for the sniping of the Hong Kong dollar. The HKMA clearly stated that it is difficult for speculators to use the bilateral manipulation strategy during the Asian financial crisis of 97 to 98 again, because Hong Kong’s monetary base has more than doubled over 20 years ago.

Hong Kong deposits increased by 0.8% in the first 4 months

For the recent Kyle Bass once again said to be bearish on the prospects of the Hong Kong dollar, and it is expected that the linked exchange rate will be decoupled. The HKMA pointed out that the other side will "attract the ball" from time to time, but by looking at the size and track record of its funds, we can know one or two.

The HKMA also clarified the rumors of capital diversion in the market, noting that in the first four months of this year, deposits increased by 0.8%. Preliminary data also showed that the deposit figures remained stable in May. At the same time, it pointed out that under the turmoil caused by the New Coronary Pneumonia epidemic, the Hong Kong dollar has continued to be strong. Since April this year, it has touched on the exchange guarantee of the Hong Kong side more than 10 times. Inflows of more than 48 billion yuan worth of funds have not been found.

440 billion US dollars of foreign exchange reserves to defend the Union

The HKMA clearly stated that it has the capacity and resources to defend the linked exchange rate system because it currently has US$440 billion in foreign exchange reserves, twice the currency base. At the same time, Hong Kong's banking system is well-capitalized, with a capital adequacy ratio of 20%, which is higher than the internationally required 8%, a liquidity coverage rate of 160%, which is also higher than the internationally required 100%, and a non-performing debt ratio of 0.6%. The United States and Singapore are low.

The HKMA also pointed out that the currency swap arrangement with the People’s Bank of China has optimized measures to exchange US dollars from the People’s Bank of China when necessary. It also pointed out that it is one-way and there is no problem of sending US dollars into the Mainland.

Kyle Bass sniper group fund hits Hong Kong dollar with 200 times leverage

Dadanyou Kyle Bass sings again Hong Kong is expected to break out of the banking crisis this year

"Reuters": China-US relations heating up linked exchange rate mechanism is essential to Hong Kong

Chen Maobo: Will not implement foreign exchange control and have confidence in the linked exchange rate

[Hong Kong version of the National Security Law] Chen Maobo said that Hong Kong does not require the consent of the United States to implement the linked exchange rate system

Hong Kong version of the National Security Law| The HKMA reiterates: No plan to change the linked exchange rate system

Monetary Authority Linked Exchange Rate System

Source: hk1

All news articles on 2020-06-12

You may like

Trends 24h

News/Politics 2024-03-28T06:04:53.137Z

Latest

© Communities 2019 - Privacy

The information on this site is from external sources that are not under our control.
The inclusion of any links does not necessarily imply a recommendation or endorse the views expressed within them.