Foreign currency reserves at US$186.2 billion
Hong Kong’s foreign currency reserve assets stood at US$186.2 billion at end-March, according to the Hong Kong Monetary Authority, up from US$177.1 billion at end-February.
Including unsettled forward contracts, foreign currency reserve assets also stood at US$186.2 billion, compared to US$177.1 billion a month earlier.
Based on these latest figures, Hong Kong is the world’s eighth-largest holder of foreign currency reserves after mainland China, Japan, Russia, Taiwan, India, South Korea and Brazil.
The foreign currency reserve assets represent approximately eight times the currency in circulation, or 45% of Hong Kong dollar M3.
HKEx, Shenzhen Stock Exchange to team up
Hong Kong Exchanges & Clearing (HKEx) and the Shenzhen Stock Exchange have signed a cooperation agreement, pledging to work together more closely to meet the domestic and global fund-raising needs of Chinese enterprises and contribute to the greater development of the Mainland economy. The agreement also commits both parties to continued cooperation, particularly in information sharing, product development and personnel training.
Speaking at the April 8 signing ceremony, HKEx Chairman Ronald Arculli said, “Not only are Hong Kong and Shenzhen close geographically, but we are also close in spirit and aspiration, sharing a strong desire to contribute to the further development of China’s economy.
“We look forward to opportunities to learn more about the needs of Mainland investors from our counterparts in Shenzhen and how we can best support the Qualified Domestic Institutional Investor Scheme.”
This investor program allows Mainland people and institutions to buy financial products overseas through commercial banks and other financial institutions on the Mainland.
Interest rates remain low
The Hong Kong Interbank Offer Rate across all tenors remained relatively low in February and March, similar to other major economies in which policy measures are in place to increase liquidity. Nevertheless, the strain in the global financial markets remained a serious concern, as measures of risk covering lower-rated sovereign and corporate lending stayed at a high level. With economic activities down and tightened lending conditions adopted by banks amid the deteriorating business outlook, total loans for use in Hong Kong registered their fifth consecutive month-to-month decline in February.
Dollar stays strong in March
 The U.S. dollar stayed strong in March against most other major currencies, except the euro and renminbi, and so did the Hong Kong dollar under the Linked Exchange-Rate System. The Effective Exchange Rate Index of the Hong Kong dollar showed a year-on-year appreciation of 4.2% in March.
Stock market rebounds slightly
 In line with global stock market developments, the local stock market saw some rebound in March. Trading activities likewise improved, with an average daily turnover increasing from US$5.12 billion in February to US$5.97 billion in March.
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