HKMA lifts yuan liquidity cap from $74.5 billion and removes funding limits
Hong Kong regulators plan to eliminate the 500 billion yuan quota on offshore yuan funding and expanded the facility's previous limit of 200 billion yuan.
The Hong Kong Monetary Authority announced changes to its yuan liquidity facility during a luncheon for bankers. Eddie Yue Wai-man, chief executive of the Hong Kong Monetary Authority, stated the current funding cap of 500 billion yuan (US$74.5 billion) would be removed if global demand grew. The facility previously operated under a 200 billion yuan quota starting in July. Yue urged lenders to utilize their international networks to channel Chinese currency liquidity abroad. Yuan-denominated transactions now account for approximately 30 percent of China's total trade settlement, up from 13 percent in 2019 according to Goldman Sachs data. Regulators also requested banks report operational difficulties to refine the system. The meeting focused on expanding the facility and preparing for future autonomous AI systems in finance.
