HONG KONG – Under the influence of global monetary policies, Hong Kong needs to keep in view the changes in capital flows caused by the interest rate environment and its impact on the financial market, the secretary for financial services and the treasury said on Wednesday.
Christopher Hui Ching-yu said this at the 2024 Lujiazui Forum in Shanghai while outlining how Hong Kong copes with challenges and promotes market development under the current international monetary policy from the perspectives of global monetary policy and real economic performance, financial stability, and financial market development.
“The Exchange Fund provides strong support for the stability of the Hong Kong dollar exchange rate,” he said while speaking at the second plenary session titled “Strengthening International Monetary Policy Co-ordination & Addressing the Challenges of Global Economic Recovery”.
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Pointing out that as of April this year, the foreign currency reserve assets exceeded HK$3.2 trillion, equivalent to about 1.7 times the Hong Kong dollar monetary base, Hui said the Hong Kong Special Administrative Region government also works with regulators to closely monitor the financial market to ensure that it operates in a stable manner.
The treasury chief noted that as US dollar interest rates are now relatively high, issuers will have a cost advantage in raising funds by issuing bonds in renminbi.
“We have also noticed that the interest rate situation has boosted the issuance of offshore RMB bonds in Hong Kong. The issuance size exceeded RMB490 billion last year, representing an increase of 88 percent over the previous year and reaching a record high.”
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As the constantly evolving artificial intelligence technology has been applied to many areas of Hong Kong's financial industry, the HKSAR government will keep an open mind, closely monitor market developments, and draw on local and overseas experience in order to promote the responsible use of artificial intelligence in the financial industry, he said.
This year's forum – themed "Promoting World Economic Growth with High-quality Financial Development” – is cohosted by the Shanghai Municipal People's Government, the People's Bank of China, the National Financial Regulatory Administration, and the China Securities Regulatory Commission.
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On Wednesday, Hui also visited the Denglin Technology Company in Shanghai, which is engaged in the research and development of artificial intelligence chips and technology innovation. Its research and development includes the creation of cutting-edge chip products and software, which continue to expand in finance and many other areas.
The treasury chief encouraged the specialist technology company to apply for a listing in Hong Kong.