Rep. John Moolenaar, chairman of the House Select Committee on the Chinese Communist Party, sent a letter to the Federal Reserve last week, urging it to review the Hong Kong Monetary Authority's access to the Foreign and International Monetary Authorities (FIMA) Repo Facility. This move comes as China actively promotes the renminbi as a global currency.

The FIMA facility, created in 2020, allows central banks to borrow dollars using their Treasury holdings as collateral. Moolenaar cited the "complete dismantling of the legal and institutional autonomy" in Hong Kong and China's efforts to boost the renminbi as reasons for the review. The Fed has received the letter and plans to respond.

Analysts suggest that Fed Chairman Kevin Warsh is unlikely to interfere with China policy at a sensitive moment. While Hong Kong drew up to $1.4 billion from the facility in May 2020, it has not materially used it since. Treasury Secretary Scott Bessent previously urged Japan to use FIMA to support the yen. However, some economists argue that restricting FIMA access might not bolster the dollar's dominance.