The Hong Kong Monetary Authority Thursday unveiled its new facility for providing Renminbi (RMB) liquidity to authorized institutions participating in Renminbi business in Hong Kong.

The authority will, on requests from individual participating institutions, provide Renminbi term funds to them against eligible collateral acceptable to the authority from June 15.

The authority's Deputy Chief Executive Peter Pang said it will serve to address short-term liquidity tightness that may arise from time to time. "For example, due to capital market activities or sudden need for Renminbi liquidity by participating authorized institutions' overseas bank customers."

"This would help enhance market confidence and support the long-term development of the offshore market," he said.

The authority reiterated the facility should not be regarded as a steady source of funding for business.