Hong Kong, Saudi Arabia monetary authorities discuss financial infrastructure, open market operations, market connectivity, sign MOU
- Hong Kong Monetary Authority and the Saudi Central Bank officials discussed issues in supervision technologies, tokenisation and payment infrastructure
- The two sides signed a Memorandum of Understanding on Wednesday to jointly work on projects
Central bank officials of Hong Kong and Saudi Arabia have agreed to jointly promote financial innovation projects and develop fintech, leveraging on the respective strengths of the two markets.
The Saudis are keen to enhance ties with Hong Kong, the world’s biggest offshore yuan centre, using the city as the bridge to mainland China, its biggest trading partner while Hong Kong is keen to deliver its financial services expertise to the Arab world’s biggest economy.
Hong Kong Monetary Authority (HKMA) and the Saudi Central Bank (SAMA) officials discussed the latest developments in areas such as supervision technologies, tokenisation and payment infrastructure with the two sides signing a Memorandum of Understanding (MOU) on Wednesday to jointly work on projects.
SAMA’s governor Ayman Alsayari, and HKMA chief executive Eddie Yue Wai-man, discussed financial infrastructure development, open market operations, market connectivity and sustainable development, according to an HKMA statement issued on Thursday.
“Through this MOU, both parties aim to promote knowledge sharing in financial innovation and fintech, focusing on emerging trends, best practices, regulatory issues, policies and legislation,” it said.
The MOU seeks to accelerate collaborative efforts across the respective fintech landscapes, it added.
“The MOU will further enhance cooperation as well as exchange of information and expertise between the SAMA and the HKMA in financial innovation and fintech,” said Yue. “We look forward to working with the SAMA to promote investment and financial market connectivity between the Middle East and Asia.”
The HKMA and SAMA were said to have discussed the latest developments in areas such as supervision technologies, tokenisation and payment infrastructure.
“Saudi Arabia’s financial sector is growing in size, with new entrants, new services, and new innovation each year, all supporting a diversified Saudi economy,” said Alsayari.
“As the Kingdom develops as a global fintech hub, our links with other growing hubs become ever more important. HKMA is a long-standing partner of the Saudi Central Bank and also a leader in innovation.”
Alsayati added that the MOU will support the relationship between Hong Kong and Saudi Arabia, helping both authorities stay at the cutting edge and strengthening the ability to deal with mutual issues.
Hong Kong must “up its game” and foster its relationships with investors in the Middle East, according to Laurence Li Lu-jen, chairman of the Financial Services Development Council (FSDC), a government-backed advisory body charged with maintaining the city’s status as an international hub.
“Hong Kong’s unique advantage has always been about connecting the Mainland and the world,” according to Li, who was speaking at a press conference organised to release the FSDC annual report. “Now, we need to up our game. We are no longer just running a bridge, we must operate a network that connects to all places.”
The Middle East is an emerging player and the Gulf’s sovereign wealth funds have become heavy investors in Asia, which has also included establishing offices in the region, said Li.
Li added that Hong Kong needs to improve its attractiveness to bring money to its markets and ensure that the city’s expertise and services are integrated into the Middle East and to markets in the Asean region.
Using the example of London and New York ETFs that are focused on Middle Eastern funds, Li said that Hong Kong should be thinking about doing the same, and having Middle Eastern ETFs listed in Hong Kong investing into the Middle East.
Such changes have profound significance for Hong Kong as an international financial centre, and “like how other IFC’s are finding funds focused on the Middle East, we should be looking to do the same”.
