The AMCM's prime policy objective is to maintain monetary and exchange stability in an open capital account environment, as defined by the pataca's link to the Hong Kong dollar and its full convertibility. It mainly depends on two policy instruments, namely, reserve requirements and monetary bills, for its conduct of monetary policy. The former is set at a sequence of 3-2-1 in percentage of deposit, which is 3% on sight deposits, 2% on time deposits with a maturity of up to three months and 1% on time deposits with a maturity of over three months. The latter is for the purpose of absorbing excessive pataca liquidity in the banking system. Monetary bills issued by the AMCM are short-term money market instruments traded by banks and offer competitive yield versus the Hong Kong interbank rates. In addition, the AMCM also operates currency swap agreements with banks for liquidity adjustment.
Last revision: 2016-02-02 09:36:24