Greater Transparency on HKMA's Market Activities

The Hong Kong Monetary Authority (HKMA) has revised the HKMA page on Reuters to further enhance the transparency of its market activities. Starting from today (Thursday), the HKMA page provides a forecast of changes in the Aggregate Balance of the banks' clearing accounts with the HKMA (Aggregate Balance) attributable to HKMA's foreign exchange transactions. The forecast will show the projected positions for "Today", "Tomorrow" and "After Tomorrow". The forecast will be published every morning before 9:00 am.

Under the currency board system, the Aggregate Balance is determined predominantly by the flow of funds into or out of the Hong Kong dollar. As HKMA's foreign exchange transactions are mostly conducted on a spot basis which are settled on T+2, their effect on the Aggregate Balance will only be known to the public at the close of the settlement day under the previous practice.

The announcement of the forecast change in the Aggregate Balance resulting from HKMA's foreign exchange transactions will enable market participants to anticipate the changes in the liquidity conditions in the interbank market. This will enhance the transparency of the linked exchange rate system and facilitate a more efficient adjustment in the interbank interest rates.

A copy of the revised format of the HKMA page and an explanatory note are attached.

Hong Kong Monetary Authority

11 June 1998