Financial Secretary Paul Chan Mo-po speaks at the Global Financial Leaders' Investment Summiton Nov 3, 2022. (PHOTO / HKSAR GOVERNMENT)
Financial Secretary Paul Chan Mo-po reassured global investors and enterprises that Hong Kong is the best international financial center in Asia and there is no cause for alarm, even amid the extremely challenging environment.
The Fed’s recent interest-rate adjustments have prompted the city’s de facto central bank to ramp up currency purchases, resulting in a fall in the city’s aggregate balance — the key gauge of cash in the banking system — from HK$350 billion ($44.6 billion) in May to around HK$100 billion in Oct
Chan made the remarks on Thursday, the last day of the city’s Global Financial Leaders’ Investment Summit, and shared how Hong Kong has weathered the risks and volatilities in financial markets.
His speech came on the heels of the US Federal Reserve’s delivering a rate hike of 75 basis points. The Hong Kong Monetary Authority raised its base rate accordingly on Thursday.
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The Fed’s recent interest-rate adjustments have prompted the city’s de facto central bank to ramp up currency purchases, resulting in a fall in the city’s aggregate balance — the key gauge of cash in the banking system — from HK$350 billion ($44.6 billion) in May to around HK$100 billion in Oct.
Chan told summit attendees that “our foreign currency reserves stand at around $450 billion, equivalent to about 1.7 times the Hong Kong monetary base. So if you bet against the Hong Kong dollar, you’re bound to lose.”
He explained the city has paid much attention to ensuring its financial stability and security. A system monitors all sectors of the financial markets and provides timely reports to control risks, he said.
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“We attach great importance to investor protection, and we believe that for a market to succeed in the long term, it must be trusted by both market participants and investors,” he said. To achieve this, Hong Kong has set clear rules for the markets, stringent requirements on the participants, and maintains high transparency of its functioning, ensuring that policies and practices are implemented in a consistent and predictable manner.
In response to recent calls that the Hong Kong SAR government do something about its tumbling stock market, the financial secretary said, “There is no cause for alarm.”
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“Hong Kong is an international financial center with an internationally aligned regulatory regime, deep liquidity with transparency, and much resilience with proper safeguards to protect investors. We are simply the best IFC in Asia. You are most welcome to talk business and make investments here,” he said.