Exchange Fund could buy more gold to boost trade
Hong Kong is considering tapping into the Exchange Fund to buy more gold as part of efforts to boost trade in gold and transform the city into a world trading centre for the precious metal, according to Chief Executive John Lee. The fund serves as the city's de facto sovereign wealth fund and war chest to defend the Hong Kong dollar's peg to the US dollar, totalling HK$134.7 billion in the first…
Chief Executive John Lee of Hong Kong is considering using the Exchange Fund to purchase additional gold, with the aim of enhancing trade in the precious metal and establishing the city as a global trading hub for it, as reported by wire service. The Exchange Fund, which serves as Hong Kong's de facto sovereign wealth fund, currently holds HK$134.7 billion in assets.
The Hong Kong Monetary Authority (HKMA), the city's central bank, is examining the potential to increase the Exchange Fund's gold reserves and engage in the local spot and futures markets. Additionally, the HKMA is contemplating gradually transferring its physical gold holdings to designated vaults managed by the Hong Kong Precious Metals Central Clearing Company Limited (PMCC).
The PMCC, a government-owned entity, recently introduced a gold clearing and settlement system in early July, which is set to commence official operations in the first quarter of the following year. Lee also announced plans to expand the range of investments available to the Mandatory Provident Fund (MPF) Schemes Authority, which oversees local residents' pension funds, by allowing for a broader selection of gold exchange-traded funds (ETFs).
Furthermore, the government plans to encourage the development of an industry association for gold and host a prominent event next year. Hong Kong is currently storing over 20,000 tonnes of metals in designated local warehouses, with total storage area surpassing 60,000 square meters, following the inclusion of the city in the London Metal Exchange's (LME) global warehousing network last year.
To continue transforming Hong Kong into a global commodity trading center, authorities will introduce more tax incentives to attract traders to establish and expand their businesses in the region, including a half-rate tax concession for commodity trading and a pilot project for tokenised warehouse-receipt financing. The city's bourse operator will also encourage the establishment of a special panel of mediators for commodity trading through the International Organisation for Mediation.
Written by urgent.news from RTHK English's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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- Exchange Fund could buy more gold to boost trade news.rthk.hk
