Regulatory Alerts2012-07-25
Added · Updated
Renminbi (RMB) Liquidity Facility
The Hong Kong Monetary Authority has revised the submission deadline for its Renminbi Liquidity Facility, moving the cutoff time from 10:00 am to 1:30 pm to allow participating authorized institutions more time to assess their liquidity needs. This operational change, which takes effect immediately, is designed to better support short-term RMB liquidity management for institutions engaged in RMB business in Hong Kong. The facility remains available with existing terms regarding one-week tenor, market-based interest rates, and eligible collateral such as Exchange Fund Bills and HKSAR Government bonds.
Tel : 2878 8060 Fax¨: 2878 8059 25 July 2012 The Chief Executive All Authorized Institutions Dear Sir/Madam, Renminbi (RMB) Liquidity Facility The Hong Kong Monetary Authority (HKMA) has put in place the RMB liquidity facility since 15 June 2012 to provide RMB liquidity to AIs participating in RMB business (Participating AIs) in Hong Kong. A number of Participating AIs have already tapped the facility. In light of the experience in operating the facility, the HKMA considers it appropriate to move back the time by which the Participating AIs may submit their requests for funds from 10:00 am to 1:30 pm. This would allow more time for Participating AIs to better assess their RMB liquidity needs. This change takes effect immediately. For ease of reference, the revised terms and conditions, in full, for the facility are attached at the Annex.
Participating AIs are welcomed to use the RMB liquidity facility to manage their short-term liquidity needs and we will continue to keep the terms and conditions of the facility under constant review, and where appropriate, make refinements in light of the experience in operating the facility. Yours faithfully, (Edmond Lau) Executive Director Monetary Management Department
Annex Terms and Conditions of the RMB Liquidity Facility (i) Tenor One week (ii) Interest rate By reference to prevailing market interest rates (iii) Eligible collateral Exchange Fund Bills and Notes HKSAR Government bonds RMB denominated bonds issued in Hong Kong by the Ministry of Finance of the People’s Republic of China (iv) Haircut on eligible collateral 5% for securities with remaining maturity at 1 year or below 10% for securities with remaining maturity at 5 years or below but over 1 year 20% for securities with remaining maturity over 5 years (v) Banks eligible RMB Business Participating AIs (vi) Contact details Participating AIs interested to borrow RMB funds should contact the dealing room of the HKMA at 2878 8104 or Reuters dealing code EFHK before 1:30 pm on each business day (vii) Settlement RMB funds will be credited to the Participating AI’s RMB RTGS account held with the Clearing Bank on T+2 basis subject to the receipt of the securities by the HKMA
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