Hong Kong Monetary Authority has re-appointed the Hongkong & Shanghai Banking Corporation (HSBC)as Settlement Institution for the US dollar clearing system in Hong Kong for a second five-year period.

According to a government press release Monday, HSBC was appointed settlement institution in August 2000 when the system was launched. It facilitates the efficient real-time settlement ofUS dollar transactions during Asian business hours, and has been operating smoothly and effectively, attracting an enthusiastic response from local and overseas banks.

Through establishing links with Hong Kong dollar and euro clearing systems in Hong Kong and with securities settlement systems, the US dollar clearing system provides payment-versus-payment settlement for foreign exchange transactions involving US dollars and delivery-versus-payment settlement of US dollar denominated securities, said the Monetary Authority.

The authority said, both arrangements help increase settlement efficiency and eliminate settlement risk.

The re-appointment takes account of the bank's robust track record and its commitment to the continued development of Hong Kong's financial infrastructure.

In the first quarter in 2005, the US dollar clearing system settled a daily average of 5,366 transactions, and had an average daily turnover of 7 US billion US dollars. Of this, the daily PvP turnover amounted to 65 transactions or 2.7 billion US dollars.

The US dollar clearing system has 69 direct participants and 164 indirect ones, among which 119 are banks domiciled outside Hong Kong.

Source: Xinhua