Paul Chan explains transfer of money from Exchange Fund for Northern Metropolis

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The Budget announced this week proposed transferring HK$150 billion from the Exchange Fund to support the development of the Northern Metropolis and infrastructure. 

Financial Secretary Paul Chan said that the economic outlook for the next few years is bright, and such allocations will not be a regular occurrence.

The Budget introduces several measures to accelerate the development of the Northern Metropolis. 

To cope with the massive construction costs, the Exchange Fund will be used again after 42 years, with HK$150 billion transferred over two years for infrastructure development.

When asked whether the transfer would continue over the next two years if the Exchange Fund incurs losses, Financial Secretary Paul Chan gave this response:

“The entire interim forecast, apart from HK$150 billion to be transferred over two years, actually includes no other transfers expected. Even without other transfers, we are reducing spending growth while increasing revenue appropriately.

In the coming years, coupled with infrastructure projects and some use of market funds through bond issuance, we are actually quite stable. Currently, we see no need for further recurring transfers.”