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Hong Kong Monetary Authority chief insists electoral overhaul not to blame for capital outflow
- Eddie Yue says the outflow was caused by mainland companies transferring money raised in Hong Kong back across the border following IPOs
- He also brushed off concerns the city’s currency could be weakening, saying the Hong Kong dollar was still on strong side of its narrow trading band
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The head of Hong Kong’s de facto central bank has dismissed suggestions that the recent weakening of the Hong Kong dollar was caused by Beijing’s overhaul of the city’s electoral system, as he expressed confidence the political shake-up would not affect the city’s financial standing.
Hong Kong Monetary Authority chief executive Eddie Yue Wai-man on Sunday said the capital outflow had been prompted instead by previous “relatively large IPOs”, which had seen mainland companies transferring the money they raised in Hong Kong dollars back across the border.
“Actually it is not related,” Yue said, when asked whether Beijing’s plan to revamp the city’s electoral system had led to the recent weakening of the Hong Kong dollar. “When there are more IPOs coming back, the capital will be back again.”
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The recent exchange rate of around HK$7.77 to US$1 was on the stronger side of the HK$7.75 to HK$7.85 trading band for the city’s currency, he added, noting that the HKMA would not be worried even if the rate further weakened to above HK$7.80.
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The exchange rate hit HK$7.77 per US dollar on March 8, according to Bloomberg data, a level not seen since March 13 last year.
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