Hong Kong Monetary Authority vows to ensure stability of city’s financial system amid coronavirus outbreak
- Will keep eye on evolving outbreak and economic developments, Eddie Yue says
- Authority confident that city’s financial industry can withstand challenges the outbreak presents
Hong Kong’s monetary authority has pledged to ensure the stability of the city’s financial system, as the Covid-19 outbreak weighs on a growth outlook already dented by months of anti-government protests.
The city’s de facto central bank has activated a contingency plan, Eddie Yue, the Hong Kong Monetary Authority’s (HKMA) chief executive, said on Wednesday, without giving details. The authority is confident that the city’s financial industry can withstand the challenges the outbreak presents, with abundant foreign reserves, ample liquidity and good-quality assets held by banks, as is indicated by the stable exchange and money-market rates, Yue said.
“In the coming months, the Hong Kong economy may face stronger headwinds,” he said. “We will keep a watchful eye on the evolving outbreak and economic developments, and will maintain a close dialogue with the banking industry, with a view to minimising the service impact on the public and providing further assistance to small and medium-sized enterprises where necessary.”
The HKMA is also concerned about cash-flow problems the city’s smaller companies – which it considers pillars of the city’s economy – might be facing. And banks are doing a job in alleviating the pressure, waiving some handling charges, giving moratoriums for property mortgage loans and cutting fees for credit card borrowing, Yue said.
The coronavirus, which originated in the central Chinese city of Wuhan in December, has proved to be more infectious than the severe acute respiratory syndrome (Sars) epidemic that broke out 17 years ago. The new virus has infected more than 40,000 people in mainland China alone, compared with more than the about 8,500 Sars cases reported worldwide.
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“Like most Hong Kong people, I went through the scourge of Sars in 2003. We paid a heavy price at the time, but learned a valuable lesson – solidarity is the best way to overcome the disease and triumph over adversity,” Yue said. “The outbreak this time may be different from Sars, but the same message holds true.”
