- John Moolenaar, chairman of the House China Committee, wrote to Fed chair Kevin Warsh urging a review of the HKMA's access to the FIMA repo facility.
- FIMA repo facility provides short-term US dollar liquidity to foreign central banks.
- Moolenaar asked Warsh to respond by October 14 on whether the Fed should allow the HKMA to keep access to the facility.
- Moolenaar cited the HKMA's role in supporting the PBOC's yuan internationalisation, following the PBOC's June launch of a yuan-denominated repo facility modelled on FIMA.
- Analysts say the facility is not a regular source of financing for Hong Kong, so a restriction would have limited impact on the city.
- Analysts say any restriction could weaken the US dollar's global dominance.
Quotes
“it is not a regular source of financing”