HKMA Annual Report 2007

The Hong Kong Monetary Authority (HKMA) today (Friday) published its Annual Report for 2007.  The Report reviews trends and events in monetary and banking affairs and reports on the HKMA's work during the year.  It also sets out plans for the coming year.

Mr Joseph Yam, Chief Executive of the HKMA, said in his statement in the Annual Report that, although 2007 had been a challenging year for the HKMA, the Hong Kong dollar and the local banking sector had remained stable despite the turbulence in financial markets.  The HKMA had also continued to strengthen Hong Kong's financial infrastructure, and made further progress in developing and maintaining Hong Kong as an international financial centre.

Hong Kong's economy had continued its above-trend growth, expanding by 6.3% in 2007.  The unemployment rate had continued to decline, reaching 3.4% at the end of the year, its lowest level for nearly 10 years.  Inflation had picked up, mainly because of strong domestic demand, increases in the prices of retained imports, a tightening labour market and the weakness of the US dollar.  The banking sector remained strong.  Aggregate pre-tax operating profits of retail banks in Hong Kong had risen by 31.1% in 2007 compared with the previous year.  The sector remained well capitalised following the implementation of Basel II on 1 January 2007.

The Exchange Fund earned a gross investment income of HK$142.2 billion in 2007.  The Fund's rate of return exceeded that of the investment benchmark approved by the Financial Secretary on the advice of the Exchange Fund Advisory Committee by 126 basis points.

Other developments in 2007 included the launch of the renminbi Real Time Gross Settlement system; the issue of the first 15-year Exchange Fund Notes; the implementation of a number of the recommendations in the Action Agenda on "China's 11th Five-Year Plan and the Development of Hong Kong"; the issue of the first renminbi bonds in Hong Kong; and the issue of a $10 polymer note.

The HKMA Annual Report 2007 may be purchased at the HKMA Information Centre or by post at HK$100 per copy.  The Report is also available on the HKMA website.  Accompanying the Annual Report is a separate publication, An Introduction to the Hong Kong Monetary Authority, which contains the summary version of the Annual Report.  This booklet is available free of charge at the HKMA Information Centre.

For further enquiries, please contact:
Thomas Chan, Senior Manager (Press), at 2878 1480 or
Hing-fung Wong, Manager (Press), at 2878 1802

Hong Kong Monetary Authority
18 April 2008