John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, has asked the Federal Reserve to review the Hong Kong Monetary Authority’s access to the Foreign and International Monetary Authorities Repo Facility (FIMA). This facility allows central banks to borrow dollars using their Treasury holdings as collateral. China is ramping up efforts to promote the renminbi as an alternative to the dollar, which still accounts for 56.7% of global central banks’ official foreign reserves, compared to just 2.1% for the renminbi. Hong Kong had drawn up to $1.4 billion from the facility in May 2020 but has not materially used it since. Moolenaar noted that the moment is appropriate for deliberate review precisely because current financial stakes remain modest.
Source: Read the original article
