Exchange Fund weighs bigger gold holdings to support Hong Kong’s trading hub plan
Hong Kong’s Exchange Fund, the war chest used to defend the local currency, is considering increasing its exposure to gold and other precious metals as part of the government’s push to develop the city into a gold trading hub. Hong Kong Monetary Authority (HKMA) chief executive Eddie Yue Wai-man said on Thursday that the Exchange Fund would continue to invest mainly in US dollar assets to support…
Hong Kong's Exchange Fund is exploring the possibility of increasing its holdings in gold and other precious metals as part of the government's initiative to transform the city into a gold trading hub. Hong Kong Monetary Authority (HKMA) CEO Eddie Yue Wai-man stated that the Exchange Fund would primarily continue investing in US dollar assets to maintain the peg between the Hong Kong dollar and the US currency.
While the scale and timing of potential gold purchases remain undisclosed, the Exchange Fund currently allocates a small portion of its $569 billion portfolio to gold. The Exchange Fund safeguards the issuance of banknotes and serves as a defense mechanism against currency speculation. The HKMA manages the Exchange Fund's investments across various asset classes, including equities, bonds, property, and commodities.
The government aims to boost gold trading by allocating more funds to gold spot and futures markets, as well as transferring physical gold holdings to secure vaults managed by the Hong Kong Precious Metals Central Clearing Company.
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