Hong Kong Monetary Authority: The percentage of US dollar assets in foreign exchange reserves was below 80% at the end of last year, and will become more diversified in the future.

Hong Kong Monetary Authority (HKMA) Chief Executive Eddie Yue stated that the proportion of US dollar assets in the foreign exchange fund will be less than 80% by the end of 2024 and 2025, and will become more diversified in the future. In recent years, the US dollar assets held by the fund have tended to have shorter maturities, as shorter-term investments are less affected when interest rates rise, and they also hope to maintain strong liquidity. Regarding the budget proposal, 150 billion Hong Kong dollars will be allocated from the foreign exchange fund to the General Building Reserve Fund in the next two fiscal years. Yue stated that the allocation of 150 billion Hong Kong dollars will have some impact on the cumulative surplus of the foreign exchange fund, but the fund recorded a profit of over 330 billion Hong Kong dollars last year, which was exceptionally high. Even after the allocation, the surplus continued to increase, with the cumulative surplus reaching over 820 billion Hong Kong dollars in early February, exceeding the expected amount by over 700 billion Hong Kong dollars by the end of 2024. HKMA Deputy Chief Executive Howard Lee, when attending a meeting of the Finance Committee of the Legislative Council, pointed out that bonds from the US and other advanced markets provide interest income that offsets the decrease in bond prices; however, both Hong Kong and global stocks have recorded negative returns, making March a very challenging month. Lee stated that after a conflict in the Middle East in late February, financial markets experienced significant volatility, with bond yields rising, bond prices falling, stocks across the board declining, and currency exchange rates also facing similar situations, although the US dollar has fallen against other currencies, bringing positive exchange rate gains for foreign currency assets held.