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HKSAR official reiterates no forex control in Hong Kong
Night view of the Victoria Bay is seen in Hong Kong, south China, Nov. 10, 2012. (Xinhua/Li Peng)
Paul Chan, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government, said on Sunday that there will be no foreign exchange (forex) control and the HKSAR government is capable to maintain both monetary and financial stability.
In response to concerns over the enactment of the anti-mask law, Chan said in an article that the Hong Kong dollar can be freely exchanged and funds can come and leave freely, which is guaranteed by the Basic Law of the HKSAR.
The HKSAR government has invoked the power under the Emergency Regulations Ordinance and put in place the Prohibition on Face Covering Regulation in its latest effort to curb continued violence.
The establishment of the new law does not mean the flow of funds will be restricted, Chan said.
"We have the determination, ability and resources to maintain monetary and financial stability in Hong Kong," Chan said, stressing that the banking system and financial markets performed well despite the social unrest during the past few months.
Hong Kong boasts 430 billion US dollars of forex reserves, and the HKSAR government's fiscal reserves stands above 1.14 trillion Hong Kong dollars (about 145 billion US dollars). The average capital adequacy ratio of banks is 20 percent, and bad loan ratio was only 0.56 percent.
Chan said the government has been monitoring the market, including short selling and derivatives trading in the stock and forex markets, and will continue to be vigilant in defending financial security.
"The 23-percent year-on-year plunge in retail sales in August, the largest monthly decline on record, is a reflection of the impact of social events," Chan said, calling on the public to join hands in opposing violence and find a way out for Hong Kong.
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