HKMA turns US$10b facility into standing arrangementFinance | 30 Jul 2021 4:22 pm
The Hong Kong Monetary Authority said on Friday that it will turn the temporary US$10 billion (HK$78 billion) liquidity support into a standing arrangement, followed by Federal Reserve.
The US Federal Open Market Committee converted the temporary repurchase agreement facility for foreign and international monetary authorities (FIMA Repo Facility) to a standing arrangement after its meeting on July 27-28.
"The US dollar funding market in Hong Kong has been operating smoothly, and the US Dollar Liquidity Facility is mainly a backstop facility by nature," HKMA said in a statement.
No key operational parameters will change - with a minimum bid rate of 0.25 percent, banks under the Facility are provided with seven days of liquidity through competitive tenders held by the HKMA every week.
The US Federal Reserve established the FIMA Repo Facility to help alleviate tightness in the global US dollar interbank money markets brought about by coroanvirus in March last year