Home / Business / News Tools: Save | Print | E-mail | Most Read | Comment
HK renders more aid to banks to ease liquidity problem
Adjust font size:

The Hong Kong Monetary Authority (HKMA) announced Thursday it has introduced two refinements to measures to ease local banks' term funding pressures and provide assurances to the market about the availability of liquidity.

HKMA chief executive Joseph Yam said the authority will extend the maximum tenor of collateralized term lending from one month to three months, and set a lower lending rate for the term-lending facility compared with the relevant interbank interest rate.

The arrangements take immediate effect and will remain in force until the end of March 2009, according to the HKMA.

Yam said the refinements were designed to help banks meet their year-end liquidity needs.

"The two refinements, together with the other four measures introduced on September 30, will help ensure adequate liquidity within the banking system and further ease pressures in the interbank market," he said.

On Sept. 30, the HKMA, the de facto central bank in the city, announced it would lend term money of up to one month to individual licensed banks against collateral of acceptable credit quality.

Together with the other measures, the arrangement has helped encourage lending in the interbank market, and interbank rates have gradually eased.

However, concerns about counterparty risk persist, and the liquidity in the longer end of the interbank market, especially beyond one month, remains tight. The authority decided to introduce refinements to enable banks to secure term money beyond one month.

(Xinhua News Agency November 6, 2008)

Tools: Save | Print | E-mail | Most Read
Comment
Pet Name
Anonymous
China Archives
Related >>
Most Viewed >>
- China targets 150-seat jumbo aircraft
- Toxic chemicals detected in Japanese food once again
- Oil refiners report huge losses
- Steel mills struggle to survive a downturn
- China shares up 3% as regional markets rally
- Output of Major Industrial Products
- Investment by Various Sectors
- Foreign Direct Investment by Country or Region
- National Price Index
- Value of Major Commodity Import
- Money Supply
- Exchange Rate and Foreign Exchange Reserve
- What does the China-Pakistan Free Trade Agreement cover?
- How to Set up a Foreign Capital Enterprise in China?
- How Does the VAT Works in China?
- How Much RMB or Foreign Currency Can Be Physically Carried Out of or Into China?
- What Is the Electrical Fitting in China?