Every penny of HK$3 trillion Exchange Fund needed for ‘crises’, says HKMA chief
Lawmakers had argued there is enough money to maintain financial stability and that surplus could be spent on social welfare and infrastructure
The head of Hong Kong’s de facto central bank has rejected calls from some lawmakers to use part of the city’s HK$3 trillion Exchange Fund to pay for infrastructure projects or social welfare.
Some HK$800 billion of the fund is needed to back Hong Kong’s monetary base and underpin the currency peg to the US dollar.
Most of the rest consists of the government’s reserves and the fund’s own accumulated surpluses.
The fund has grown from HK$350 billion in 1993 to HK$3 trillion, prompting suggestions that there is more than enough money to maintain financial stability and that the surplus could be put to use now.
But Chan said the experience of the global financial crisis in 2008 showed that the government should be ready for every eventuality.
The government decided to provide a full guarantee for HK$5.8 trillion of deposits in 2008. The total assets of the local banking sector had grown to HK$17 trillion at the end of last year, Chan said.