HKMA moves to strengthen RMB liquidity as China tightens

HONG KONG - The Hong Kong Monetary Authority (HKMA) has announced two measures to facilitate RMB liquidity, including i) using its swap line with the People’s Bank of China (PBoC) to provide one-day (rather than only one-week) funds to banks, which will be available on the next day (T+1); and ii) using its own RMB funds to offer overnight RMB lending, available on the same day (T+0). Analysts see the measures as a response to tight RMB liquidity conditions that emerged in June during China’s interbank liquidity squeeze.