4
Financial and Monetary Affairs
Hong Kong has a robust real-time gross settlement (RTGS) interbank payment system. All banks in the city maintain settlement accounts with the Hong Kong Monetary Authority (HKMA) through the HKD RTGS system. The banks may obtain intra-day and overnight liquidity through repurchase agreements with the HKMA using Exchange Fund Bills and Notes (EFBNs) and government bonds as collateral.
US dollar (USD), euro and RMB RTGS systems enable transactions in these currencies to be settled in real time. All four RTGS systems are linked to enable foreign exchange transactions to be settled on a payment-versus-payment basis.
The HKMA's Central Moneymarkets Unit (CMU) provides clearing, settlement and custodian services for EFBNs, government bonds and other HKD or foreign currency public/private debt securities. It is linked to a number of international and regional central securities depositories to enable overseas investors to hold and settle securities lodged with the CMU and local investors to hold and settle securities lodged with overseas systems. Through its seamless interface with the RTGS systems, the CMU system is able to settle securities transactions on a delivery-versus- payment basis. Besides debt securities, the CMU provides a standardised and automated platform for the investment fund industry to streamline the handling of investment fund order instructions.
Chart 6
External Positions of Als
HK$ Billion
20,000
15,000
17,510
16,726
15,283
13,246
10,000
12,483
5,000
0
2011
2012
2013
2014
2015
Year
Bond Market Development
Outstanding HKD debt securities, including EFBNs, totalled $1,525 billion at the end of 2015.
Chart 7
Total Outstanding HKD Debt Securities
HK$ Billion
2,000
1,500
1,525
1,419
1,410
1,261
1,000
1,309
0
2011
2012
2013
2014
2015
Year
61