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Financial and Monetary Affairs
The HKMA is responsible to the Financial Secretary for the use and the investment management of the Exchange Fund. To meet the objectives of preserving capital, providing liquidity to maintain financial and currency stability and generating an adequate long-term return, the Exchange Fund is managed as distinct portfolios. The Backing Portfolio holds highly liquid US dollar-denominated debt securities to fully back the monetary base. The Investment Portfolio aims to preserve the fund's long-term purchasing power. The Exchange Fund's asset allocation strategy is guided by the investment benchmark approved by the Financial Secretary on the advice of the EFACIS, A Strategic Portfolio was set up in 2007 to hold all the shares of the HKEX acquired for strategic purposes by the Financial Secretary using the Exchange Fund. At the end of 2012, the Exchange Fund's total assets stood at $2,781.1 billion. The accumulated surplus of the Exchange Fund amounted to $623.9 billion16.
Another function related to the Exchange Fund is currency issuance. Bank notes in denominations of $20, $50, $100, $500 and $1,000 are issued by the three note issuing banks: Bank of China (Hong Kong) Limited, the Hongkong and Shanghai Banking Corporation Limited and the Standard Chartered Bank (Hong Kong) Limited. The note-issuing banks may issue. currency notes only by surrendering non-interest bearing US dollar backing at a fixed exchange rate of $7.80. All five denominations of the 2010 series of banknotes, which incorporate state-of- the-art security features, have been in circulation since January 2012.
Through the HKMA, the Government issues $10 currency notes and coins of $10, $5, $2, $1,50 cents, 20 cents and 10 cents denominations. The value of all notes and coins in circulation at the end of 2012 was $301.4 billion.
Websites
Financial Services and the Treasury Bureau: www.fstb.gov.hk
Office of the Commissioner of Insurance: www.oci.gov.hk
Official Receiver's Office: www.oro.gov.hk
Companies Registry: www.cr.gov.hk
Hong Kong Monetary Authority: www.hkma.gov.hk
Securities and Futures Commission: www.sfc.hk
Investor Education Centre: www.hkiec.hk
Mandatory Provident Fund Schemes Authority: www.mpfa.org.hk Hong Kong Exchanges and Clearing Limited: www.hkex.com.hk
Financial Reporting Council: www.frc.org.hk
Financial Dispute Resolution Centre: www.fdrc.org.hk
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The details of the management of the fund and the investment style adopted are set out and explained in the HKMA'S annual report.
Foreign currency asset figures have been published monthly since January 1997 to demonstrate the Government's continued commitment to greater openness and transparency. In addition, an abridged balance sheet of the Exchange Fund and a set of Currency Board accounts are published monthly.
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