No Exchange Fund withdrawal in next 5 years after latest transfers: Paul Chan
Finance chief assures public the HK$150 billion withdrawal will not be repeated under current medium-range forecast
Hong Kong does not plan to make another transfer from its Exchange Fund in the next five years, the finance chief has said, citing a new medium-range forecast that explains why the rare move will not be repeated.
“In the entire medium-range forecast, apart from the HK$150 billion transfer over the two years just mentioned, there are actually no other transfers projected,” Chan told a radio programme. “I will not make this a normal practice.”
His assurances followed Wednesday’s budget announcement that the government would withdraw HK$75 billion annually for two years from the Exchange Fund’s investment income to top up the Capital Works Reserve Fund.
Chan argued that with the fund’s total assets exceeding HK$4.1 trillion, the transfer represented only about half of last year’s investment gains and would not undermine the city’s financial stability or its ability to defend the currency peg.