Monetary Authority Chief Executive Joseph Yam says it would be better to help Mainland residents move their foreign currency out of the Mainland in a safe and orderly way than to try to restrict them.

In his weekly Viewpoint column published today Mr Yam said when there is strong demand for capital to move across jurisdictions, trying to restrict it will often just drive the flow underground.

Building proper facilities to channel such flows, so that they no longer need to go underground, is a better and more constructive approach.

"The high inflation rate and the appreciation pressure on the exchange rate suggest that relaxation may be overdue. But there is obviously a need to emphasise controllability, gradualism and the ability to take the initiative in financial reform and liberalisation.

"To the extent that there is consensus, this seems to be in favour of the orderly outflow of capital. Meeting the desire of individuals to invest overseas in an orderly manner is a policy well worth pursuing."

Mr Yam said the choice of investment is a matter best left to individuals, adding it is not the role of the authorities to decide how people should invest their money.

If it is considered that Mainland investors making such cross-border investments require more protection, a threshold for the amount of money a person is allowed to invest overseas could be imposed so the channel is only available to larger and more sophisticated investors, he added.