HK Financial Risk Still Manageable, Paul Chan Says

Financial Secretary Paul Chan on Sunday gave assurances that the risk to Hong Kong’s financial system remains ‘manageable’ despite the impact of the coronavirus pandemic on markets and economies across the globe.

Writing in his blog, Chan said a government-guaranteed loan scheme for businesses has already seen 180 applications involving HK$400 million just in the first four days.

He also said that repeated interventions by the Hong Kong Monetary Authority (HKMA) to sell the Hong Kong dollar to defend the local currency’s peg with the US dollar, is “normal”, and shows capital inflow into the SAR.

“While the social events and violent clashes that started last June had previously hurt market sentiment, they didn’t lead to any obvious capital outflow”, Chan wrote.

“As for the recent coronavirus epidemic, although local equities were obviously under external pressure, there was also no sign of any mass capital outflow.”

He also said there is “not a high risk” that property prices could “fall off a cliff”, noting that the supply of flats are still tight and prices are still at a high level.