Chen Maobo: Hong Kong has no plans to transfer funds from the Exchange Fund again within five years

Financial Secretary Paul Chan announced last week in the budget that for the first time, HKD 150 billion of investment income from the Exchange Fund will be transferred for infrastructure projects such as the Northern Metropolis. According to the South China Morning Post, Chan stated that there are no plans to transfer funds from the Exchange Fund again in the next five years, and that such transfers will not become a norm.

Chan believes that the scale of the Exchange Fund is quite large, and this approach will not undermine Hong Kong's financial stability or its ability to defend the peg of the Hong Kong dollar to the US dollar. Looking ahead, the government will explore issuing more long-term bonds to better match cash flow with investments in the Northern Metropolis. Even though the ratio of policy debt to GDP is expected to rise from the current 14.4% to about 19.9% over the next five years, this level remains relatively low by international standards