Macau’s Secretary for Economy and Finance, Lionel Leong Vai Tac (pictured), said on Sunday that the new limit per transaction for withdrawals in ATMs using mainland China bank cards would not negatively affect the city’s gaming industry.
The Monetary Authority of Macao has set a limit of MOP5,000 (US$626) or HKD5,000 per transaction for withdrawals in the city’s ATMs using bank cards issued by mainland China banks. The new limit per transaction came into force on Friday.
The daily withdrawal limit with the use of such cards remains at CNY10,000 (US$1,449), or at an annual withdrawal limit of CNY100,000.
Speaking to reporters on Sunday, Mr Leong said that the new withdrawal limit aimed to maintain the city’s monetary stability and strengthen oversight of capital flows.
Since the daily limit for withdrawals remains unchanged, the measure was not expected to have any negative impact on ATM cash withdrawals by Macau residents or tourists, noted the government official. It was also not expected to negatively affect the city’s gaming industry, Mr Leong added.
Christopher Jones of the Buckingham Research Group Inc stated in a Friday note that the latest move to limit the withdrawal amount per transaction “is part of a larger crackdown on currency controls by Beijing”.
“Given the abrupt nature of the action relative to recent positive comments from Macau leaders, we believe the actions are more about currency outflows and less about a worsening view of Macau, by Chinese leaders,” said Mr Jones.
He added: “Importantly, the reduction is not a reduction in daily withdrawal, but rather a reduction per transaction. Therefore, we believe the impact on Macau should be considerably less of an issue as initially speculated.”
Hong Kong-listed casino stocks took a hit on Friday prior to the Monetary Authority of Macao’s clarification on the new limits on ATM withdrawals. That was following a story by the South China Morning Post newspaper saying that the Macau government was planning to cut in half the amount of cash China UnionPay bank cardholders can withdraw from ATM machines in the city.
MGM Resorts chairman and chief executive James Murren said the “massive overreaction” in the Hong Kong-listed stocks was due to “a lack of context of what the Chinese government is trying to accomplish”. MGM Resorts is the parent company of Macau-based casino operator MGM China Holdings Ltd.
“This is very consistent with what the government has deployed for many years. There is a very strong, underpinning philosophy in China: they want Macau to grow not in a non-sustainable, not in an inflated way; they want to see gradual, consistent growth,” Mr Murren told Bloomberg TV.
“I’m sure there will be some modest revenue impact, but it will not be severe and certainly not long term,” he added.
Analyst Cameron McKnight of brokerage Wells Fargo Securities LLC said in a Friday memo that the change to the withdrawal limits per transaction “highlights the regulatory and policy risk in Macau”.
“The noise around this issue could be a harbinger of tighter regulation, especially given the Chinese government’s increasingly micro efforts to control capital flight, and recent news that currency controls at the border are being stepped up,” added Mr McKnight.
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