HKMA Liquidity Facilities Framework

55th Floor, Two International Finance Centre, 香 港 中 環 金 融 街 8 號 國 際 金 融 中 心 2 期 55 樓 8 Finance Street, Central, Hong Kong 網 址：www.hkma.gov.hk Website: www.hkma.gov.hk Our Ref.: B1/15C 7 August 2026 The Chief Executive All Authorized Institutions Dear Sir/Madam, HKMA Liquidity Facilities Framework I am writing to update you on the Hong Kong Monetary Authority’s (HKMA) Liquidity Facilities Framework for authorized institutions. The HKMA has conducted a review of its Liquidity Facilities Framework enunciated in the circular of 26 August 2019 (the Framework) in light of practices of other central banking institutions. The review has confirmed that the Framework remains adequate and effective, with suitable refinements to the minimum haircuts for the eligible collateral to further enhance the efficacy of the Framework. Please refer to the enclosure for details of the refined minimum haircuts, which supersedes the Annex to the “HKMA Liquidity Facilities Framework for Banks:
Operational Note” with immediate effect.
Yours faithfully,
Darryl Chan
Deputy Chief Executive
Encl.

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Annex
Settlement Facilities Collateral
Assets Method Haircut
Exchange Fund Bills and Notes Repo 2% per year of remaining maturity Standby Liquidity Facilities Collateral Assets Method Haircut Settlement Facilities Collateral (see above) Repo Minimum of 2.5% Cash (USD, EUR, RMB, JPY or GBP) FX Swap n/a Hong Kong Government Bonds Repo Minimum of 2.5% High quality liquid securities denominated in HKD, USD, EUR, RMB, JPY or GBP issued by governments or supranationals 1 acceptable to the HKMA on a case-by-case basis Repo Minimum of 3% Other investment grade securities (as rated by major rating agencies) denominated in HKD, USD, EUR, RMB, JPY or GBP, acceptable to the HKMA on a case-by-case basis Repo Minimum of 7%

The HKMA may accept a wider scope of debt securities issued by supranationals as eligible collaterals on a case-by-case basis taking into account green considerations.

Contingent Term Facility Collateral and Resolution Facility Collateral Assets Method Haircut Standby Liquidity Facilities Collateral (see above) See above See above Residential mortgages acceptable to the HKMA (preference given to mortgage loans under the Home Ownership Scheme or the Private Sector Participation Scheme (HOS/PSPS mortgages) 2 and mortgages satisfying the purchasing criteria of The Hong Kong Mortgage Corporation Limited (HKMC)). Credit Facility Minimum of 2.5% 3 Other loans of acceptable credit quality which can be effectively charged or transferred to the HKMA (e.g. via portfolio securitisation). 4

Credit Facility or other appropriate method To be determined by HKMA on a case-by-case basis

Eligibility of HOS/PSPS mortgages is subject to the Hong Kong Housing Authority’s prior written consent to the transfer of the guaranteed loan. Haircut will be applied over the book value of the portfolio of mortgages provided by the bank as collateral: HOS/PSPS mortgages at least 2.5%; HKMC compliant mortgages at least 6%; other residential mortgages at least 8%. The HKMA will work with banks on a bilateral basis with a view to establishing information requirements and preparedness in respect of the use of other loan assets as collateral.