Eddie Yue, Chief Executive, Hong Kong Monetary Authority
The Hong Kong Monetary Authority (HKMA) has been closely monitoring the financial markets following FOMC's latest rate cut and other policy measures. Asian equity markets, including Hong Kong, have seen significant corrections and sharp volatility today. But local markets continue to operate in a smooth and orderly manner. The Hong Kong dollar exchange rate remains stable at around 7.76. Hong Kong dollar interest rates are holding firm today because of an IPO activity. When the funding demand eases, we expect that the Hong Kong interbank rates will likely follow the downward trend of the US interest rates.
In the past few weeks global financial markets have been highly volatile. While measures taken by central banks and fiscal authorities around the world will help support the economy and stabilise the market, future market movements will depend on the effectiveness of the measures to contain the spread of the coronavirus in different countries. Going forward, the financial markets will continue to be volatile in response to news flows relating to both public health and financial measures.
It is important to note that the financial system in Hong Kong is highly resilient with strong buffers. The banking system is robust and well capitalised with ample liquidity. The HKMA will monitor the market situation in coordination with other regulators and safeguard monetary stability in Hong Kong according to the Linked Exchange Rate System. As it is expected that financial markets will remain highly volatile, the public should assess and manage risks carefully before making any investment decisions.