HKMA 1997 Annual Report Published

The 1997 Annual Report of the Hong Kong Monetary Authority (HKMA) is published today (27 April).

"The year 1997 has been one of the most eventful and significant chapters in the financial history of Hong Kong. The World Bank/IMF Annual Meetings provided a most timely opportunity for the international financial community to witness the successful political transition of Hong Kong as a vital international financial centre," said Mr Joseph Yam, Chief Executive of the HKMA in the Report.

"However, the most serious currency turmoil in Asia dominated the last quarter of the year. But Hong Kong was fortunate and with good reasons to be the least and the last to be affected," added Mr Yam.

The fact that the Hong Kong dollar has weathered the regional financial turmoil relatively unscathed compared to other Asian currencies can be attributed to the numerous reforms of the monetary system introduced over the last 14 years to strengthen the currency system, said Mr Yam.

The performance of the Exchange Fund and the Land Fund was also satisfactory in 1997 despite the extremely volatile market in 1997, according to the Report.

The Land Fund was transferred to the Hong Kong Special Administrative Region Government on 1 July 1997 for management by the HKMA. Detailed accounts of the Land Fund are shown for the first time in the HKMA Annual Report.

On the banking front, limited exposure to the Asian region explained why banks in Hong Kong were able to stand up well against the currency turmoil.

To prepare Hong Kong's banking sector for the next millennium, the HKMA has commenced a strategic study to address the challenges ahead.

In his conclusion to the Chief Executive's Statement, Mr Yam said, "Lessons learnt from 1997 were clear: we will have to remain highly vigilant and should be proactive and pre-emptive rather than reactive."

"We shall continue to improve the soundness of the banking sector; enhance the transparency of the financial system; and promote the development of a deep and liquid debt market," he added.

Hong Kong Monetary Authority
27 April 1998