Financial System Highly Resilient

The financial system in Hong Kong is highly resilient with strong buffers, despite sharply volatile global markets due to the spread of the coronavirus in different countries.

Monetary Authority Chief Executive Eddie Yue made the remarks to reporters today, noting that the authority has been closely monitoring the financial markets following the US Federal Open Market Committee's latest rate cut and other policy measures.

"Asian equity markets, including Hong Kong markets, have seen significant corrections and sharp volatility today, but local markets continue to operate in a smooth and orderly manner."

He added that the Hong Kong dollar exchange rate remains stable at around $7.76.

"Hong Kong dollar interest rates are holding firm today, mainly because of an IPO activity. When this funding demand eases, we expect that the Hong Kong dollar interest rates will likely follow the downward trend of US interest rates."

Mr Yue noted the global financial markets have been highly volatile in the past few weeks.

"While measures taken by central banks and fiscal authorities around the world will help support the economy and stabilise the markets, future market movements will depend on the effectiveness of the measures to contain the spread of the coronavirus in different countries.

"Going forward, the financial markets will continue to be volatile in response to news flows relating to both public health and financial measures."

He stressed the local banking system is robust and well capitalised with ample liquidity and that the authority will monitor the market situation in co-ordination with other regulators.

"We will safeguard monetary stability in Hong Kong in accordance with the Linked Exchange Rate System.

"We expect that the financial markets will remain highly volatile and the public should assess and manage the risks carefully before making any investment decisions."