Hong Kong Monetary Authority (HKMA) announced on July 4, 2022, that it would optimize the currency swap with the People’s Bank of China (PBOC). Financial experts analyzed the Chinese Communist Party (CCP) trade as handing over US$120 billion to the CCP on a silver platter.
Politics Commentator, Gordon Poon Tung-hoi, mentioned in an interview with The Epoch Times that the reciprocal currency arrangements with China, also known as currency swap, continued to treat Hong Kong as an ATM: withdrawing money from Hong Kong systemically and regularly.
Poon said, “The CCP is taking Hong Kong’s money to save the economy of mainland China.”
Financial experts’ analysis showed the Hong Kong dollar is pegged to the US dollar. That means exchanging HKD940 billion for RMB is equivalent to sending US$120 billion for free to the CCP.
HKMA’s Chief Executive, Eddie Yue Wai-man, stated in a press release on July 4, 2022, that HKMA would “optimize” the currency swap agreement with PBOC.
Yue stated that HKMA would also change from the RMB liquidity arrangement to a standing agreement without renewal rules.
“By expanding and simplifying operation scales, Yue was confident that the city owns sufficient RMB liquidity as an offshore market. It will further support the city’s unique advantage and positioning in its leading role in developing offshore yuan business.” the release wrote.
The scale has been expanded from RMB500 billion or HKD590 billion (US$75 billion) to RMB800 billion or HKD940 billion (US$120bilion).
The HKMA stated that other details would be announced in due course.
PBOC claimed that expanding the currency swap agreement would deepen and support mutual financial relationships. Besides helping Hong Kong as an international financial hub, the bank would also build its steady growth in the offshore RMB market.
Hong Kong Becomes CCP’s ATM
Gordon Poon mentioned, “Currency swap is an ongoing strategy. It will weaken Hong Kong financially to support the RMB in the long run. Simply put, CCP treats Hong Kong as their ATM, draining the wealth systemically. It is a slow and painful death for Hong Kong. CCP is taking our money to save their economy.”Columnist Simon Lee Sai-man pointed out that RMB is not a free-flowing or convertible currency. Hence, it is unnecessary for any currency swap.
Lee believed the agreement was only to satisfy the Roadmap of Renminbi Internationalization. There would be no substance even if the deal were to be complete. “As a managed market, the RMB offshore market is insignificant.”
Victor Ho, the senior media editor, said US$120 billion is about 25 percent of Hong Kong’s foreign exchange reserves. The money in the vault would vanish because CCP had taken it away by currency swapping.
“Mr. T,” a finance expert, denounced the agreement as “a robbery.” “The Hong Kong dollar is pegged to the US dollar. The exchange of HKD940 billion into RMB is equivalent to US$120 billion. The Hong Kong government has no control over how their bank would use the US$120 billion given to CCP.”
Mr. T revealed that the so-called “RMB internationalization” was a flop; mainland manufacturers would instead take US Dollar than RMB from buyers.
He also said, “The recent seizure of money withdrawal at certain mainland Chinese banks reflects how dried-up the CCP’s economy is.”
