The Hong Kong Monetary Authority (HKMA), the de facto central bank of the Special Administrative Region of China, took emergency measures today to cope with the tense situation on the island.
Hong Kong has been dealing with a growing protest movement demanding a more participatory elections process for the local government that has escalated in recent days. Occupy Central is a movement that sprung out of the global anti-financial establishment trend of Occupy Wall Street, but two days ago it officially changed its cause to universal suffrage.
The HKMA released a statement earlier today: “In view of the public order situation in Central and other areas, HKMA and affected banks have activated their business continuity plans this morning to maintain the normal operations of the core functions of the banking system. The Currency Board mechanism will maintain the stability of the Hong Kong dollar exchange rate. The HKMA will also inject liquidity into the banking system as and when necessary under the established mechanism.”
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Protesters are demonstrating against Beijing’s influence over the city’s government and claim that the promise of preserving their civil rights is not being fulfilled by China. The local police used tear gas yesterday in an attempt to try and break up the crowds which resulted in many more residents joining the protest and engaging with the police and supposedly threatening banks.
The HKMA said that according to reports received from banks at 7am today local time, 29 branches, offices and ATMs of 17 banks were affected and will be closed temporarily until further notice. Three hours later, and as of the last update, there were a total of 36 branches, offices and ATMs of 20 banks temporarily closed.
Trying to reassure the markets, the HKMA stated: “The payment and settlement systems, including the HKD, USD, EUR and RMB Real Time Gross Settlement (RTGS) systems as well as the Central Moneymarkets Unit will continue to operate normally.”
“The Hong Kong dollar eased slightly at opening but the exchange rate remained generally steady. The foreign exchange market functions normally. There is ample liquidity in the interbank markets and HIBOR are at similar levels as last week,” the HKMA added in its latest update.
As of 10.30 am today local time, the Hong Kong dollar, RMB, US dollar and Euro Real Time Gross Settlement systems recorded a total transaction volume equivalent to HK$145 billion, which is about normal.