The Chief Executive of the HKMA, Mr Eddie Yu, attended the meeting of the Legislative Council Panel on Financial Affairs through an online meeting.
He said that on the whole, Hong Kong's financial system is mainly affected by three factors, the first is the epidemic, the second is the US interest rate hike, and the third is geopolitics, but he believes that Hong Kong's financial system is sufficiently resilient to earthquakes.
Talking about the local economy, Yu Weiwen said that the Hong Kong economy grew by 6.4% year-on-year last year, but the recent outbreak of the Omicron variant virus may have an impact on the local and global economy in the first half of this year, and the business atmosphere in the first quarter has become more pressured. It is expected that the epidemic will cause the unemployment rate to rise again this quarter, and although inflation has "slightly increased", it is at a manageable level.
As for the financial market, the Hong Kong dollar has been very stable in the past two years. It is currently trading at 7.79 against the US dollar. With the US rate hike and the widening of the Hong Kong-US interest rate gap, the Hong Kong dollar is expected to move towards 7.85.
Yu Weiwen also pointed out that the total deposits rose 14.6% last year, and the property market was hovering at a high level. At the beginning of the year, the property price fell slightly, but it was still stable.
Mainland emphasizes economic stability
The market expects the U.S. to start raising interest rates in early March. Yu Weiwen said that the bureau is concerned about whether the already high valuation of U.S. stocks will undergo major adjustments if the pace of interest rate hikes is fast, and whether the U.S. interest rate hike will cause funds to leave emerging markets.
He also said that the mainland's economy has generally stabilized, but under the variant epidemic, the economy is under great downward pressure. However, the mainland emphasizes stabilizing the economy and the policy is expected to be loose. Affected.