Exchange Fund's income close to peak

Business | Stella Zhai 3 Mar 2020

Hong Kong Monetary Authority chief executive Eddie Yue Wai-man expects the Exchange Fund's investment income to reach HK$260 billion, close to its peak in 2017, according to the latest valuation.

Exchange Fund investment income accumulated to HK$247.2 billion as of the third quarter last year, rising 21 times over a year earlier, and the full-year figure to be released in May.

The HKMA also stated that first-time homebuyers who choose a stage payment plan, in which they pay a downpayment and start mortgage installments after the units are completed, may pay a higher downpayment if home prices drop once their units are finished.

Yue said home prices rose in the first half of last year but fell slightly in the second half due to the "social incidents," adding that transaction volume also fell.

He added that HKMC Insurance, under The Hong Kong Mortgage Corporation Limited, had received around 300 applications under the 90% Guarantee Product of the SME Financing Guarantee Scheme and approved 100-200 of them.

As for the 100 percent guarantee product, which was proposed in the latest government budgets, Yue said the HKMA is preparing for the scheme and expected it to launch within a month after the government obtains funding approval from the Finance Committee of the Legislative Council, and believes it will offer timely help to small and medium-sized enterprises.

Yue said the financial system is stable and the Linked Exchange Rate System is operating normally, and they had not seen significant capital outflow despite challenges posed by the virus outbreak.

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