The Hong Kong Monetary Authority (HKMA) has launched a temporary liquidity facility under which US$10 billion will be made available (the Facility) to assist licensed banks with US dollar liquidity. The Facility will comprise of funds obtained through the US Federal Reserve’s FIMA Repo Facility (see our previous blog post here).
US dollar liquidity will be provided to licensed banks through competitive tenders in the form of repurchase transactions for a term of seven days, settled on the day following the tender. The HKMA will conduct a tender every week beginning on 6 May 2020. The Facility is expected to be maintained until 30 September 2020.
The key parameters of the Facility and the relevant tender forms can be found in Annex A, Annex B and Annex C to the circular.