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Banking & finance
BusinessBanking & Finance

National security law: HKMA tells bankers it’s ‘business as usual’ as Hong Kong absorbed US$14 billion of fund inflows since April

  • HKMA has intervened 29 times since April to defend its currency peg after inflows tested the stronger end of its trading band
  • Global financial institutions can continue to issue bearish reports on Hong Kong’s economic outlook, HKMA chief Yue says

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The entrance to the Hong Kong Monetary Authority office at International Financial Centre, Central. Photo: Nora Tam
Enoch Yiu
Hong Kong has attracted US$14 billion in net capital inflows since April, indicating the local financial market remains resilient in the face of upheavals triggered by the national security law.

Eddie Yue Wai-man, chief executive of Hong Kong Monetary Authority, disclosed the number in a letter on Thursday seeking to reassure banks in the city about the impact of the law. The de facto central bank added that their ability to collect information or publish bearish views about the economy remains unaffected.

Foreign banks or their local units can continue to conduct short selling, hedging and other capital markets trading as usual, Yue said in the letter, its first public comments regarding the controversial legislation.

China shocked the financial markets by unveiling the proposal in late May, bypassing the local legislature and enacting it on June 30. The law allows Beijing wide-ranging powers to crack down dissents on national security grounds.

HKMA chief executive Eddie Yue Wai-man tell bankers not to be worried about the national security law. Photo: Nora Tam
HKMA chief executive Eddie Yue Wai-man tell bankers not to be worried about the national security law. Photo: Nora Tam

The law has provoked strong reactions from western governments, including export sanctions, cancellation of extradition arrangements and tit-for-tat policy reprisals.

The inflows have helped push the local dollar to the stronger end of its trading band, forcing the HKMA to sell HK$109.3 billion (US$14.1 billion) of its currency to weaken its value and preserve the 36-year peg to the US dollar.

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