HK to Issue over 2 bln USD Exchange Fund Bills

Source: Xinhua

Additional exchange fund bills of 18 billion HK dollars (2.32 billion U.S. dollars) will be offered in tenders on March 16, 23 and 30 to meet banks' increased demand for the paper given the abundance of liquidity in the banking system, the Monetary Authority of Hong Kong announced on Tuesday.

The issuance of additional exchange fund paper will be conducted by expanding the supply of three-month and six-month Exchange Fund Bills. The three-month bills, to be tendered March 16, 23 and 30, will be increased by a total of 4 billion HK dollars (516 million U.S. dollars), while the six-month bills, to be offered March 16 and 23, will be expanded by 5 billion HK dollars (645 million U.S. dollars) in total.

The authority said that the additional issuance simply represents a change in the composition of the monetary base, with a shift from the aggregate balance to exchange fund paper.

Interbank liquidity is expected to remain abundant after the issuance of additional bills, which is not expected to have a significant impact on liquidity conditions and interest rates.

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Editor: Chen Minjie