Core Viewpoint - The Hong Kong Monetary Authority announced that as of the end of July 2025, Hong Kong's official foreign exchange reserves amounted to 425.4 billion USD, a decrease from 432.0 billion USD at the end of June 2025 [1] Summary by Relevant Categories Foreign Exchange Reserves - As of July 2025, Hong Kong's foreign exchange reserves were reported at 425.4 billion USD, down from 432.0 billion USD in June 2025 [1] - Including unsettled foreign exchange contracts, the total foreign exchange reserves stood at 424.5 billion USD as of July 2025, compared to 431.9 billion USD in June 2025 [1] Monetary Supply - The total foreign exchange reserves of 425.4 billion USD are equivalent to more than five times the currency in circulation in Hong Kong [1] - The reserves represent approximately 37% of the Hong Kong dollar monetary supply M3 [1]

Group 1 - The People's Bank of China reported that as of the end of July, the country's gold reserves reached 73.96 million ounces, an increase of 60,000 ounces month-on-month, marking the ninth consecutive month of gold accumulation [1] - As of the end of July, China's foreign exchange reserves stood at $329.22 billion, a decrease of $25.2 billion from the end of June, representing a decline of 0.76% [1] Group 2 - On August 7, gold prices experienced a sharp decline, dropping by $16, while silver's gains narrowed to approximately 0.6% [4] - Gold prices surged, breaking through $3,466, while the US dollar index saw a significant drop [7]

Group 1 - The Hong Kong Monetary Authority (HKMA) intervened in the foreign exchange market on August 6, buying HKD 8.439 billion to defend the Hong Kong dollar's peg to the US dollar as it approached the weak end of the trading band at 7.85 [1] - Since the beginning of June, the HKMA has intervened 10 times, buying a total of HKD 109.529 billion to stabilize the currency after it shifted from a strong to a weak position [2] - The HKMA's actions are part of a long-standing currency peg system established in 1983, which allows the Hong Kong dollar to fluctuate between 7.75 and 7.85 against the US dollar [1][2] Group 2 - The recent weakness of the Hong Kong dollar is attributed to two main pressures: low interbank rates encouraging carry trades and a rising US dollar index since early July [2] - The HKMA noted that while liquidity has decreased, leading to a mild rise in interbank rates, they remain significantly lower than US rates, which continues to exert pressure on the Hong Kong dollar [2] - Analyst Lu Churen predicts that the weakness of the Hong Kong dollar may persist until the interbank rates rise above 2%, indicating that the current "currency defense battle" may continue until then [3]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) has intervened in the currency market to stabilize the Hong Kong dollar, which has triggered the weak-side Convertibility Undertaking at 7.85 against the US dollar [1] Group 1: Currency Intervention - On August 6, the HKMA bought HKD 84.39 billion in the market, marking its fourth intervention within a week to support the local currency [1] - The total amount bought by the HKMA during these four operations reached HKD 223.26 billion, aiming to maintain the exchange rate within the 7.75-7.85 range against the US dollar [1] - The HKMA's actions were prompted by continuous capital outflows from the stock market and persistently low local interest rates [1] Group 2: Market Impact - Following the interventions, the banking system's liquidity is expected to decrease to HKD 640.62 billion by August 8 [1] - The HKMA's previous interventions included buying HKD 64.29 billion on August 5, HKD 35.33 billion on August 1, and HKD 39.25 billion on July 31 [1]

Group 1 - The core viewpoint of the article highlights the positive market response to the "Cross-Border Wealth Management Connect" 2.0 optimization measures since their implementation [1] - As of the end of June this year, over 160,000 individual investors have participated in the program, representing an increase of over 120% compared to version 1.0 [1] - The total market value of investments held by Hong Kong participating institutions in the southbound scheme has reached over 16 billion RMB, showing a twofold increase compared to "Cross-Border Wealth Management Connect" 1.0 [1] Group 2 - Investors in the southbound scheme are increasingly diversifying their product choices, moving from primarily deposit products to a growing allocation in funds and bonds [2]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) has purchased HKD 35.33 billion to defend the currency peg system [1] Group 1 - The action taken by the HKMA indicates a proactive approach to maintain the stability of the Hong Kong dollar against fluctuations in the foreign exchange market [1] - This intervention reflects the ongoing challenges faced by the currency due to external economic pressures [1] - The purchase amount signifies a significant commitment to uphold the currency's value and the integrity of the linked exchange rate system [1]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) reported a significant increase in the foreign exchange fund's total assets and investment income for the first half of 2025, despite a challenging global investment environment [1][2]. Group 1: Financial Performance - As of June 30, 2025, the total assets of the foreign exchange fund reached HKD 42,971 billion, an increase of HKD 2,161 billion compared to the end of 2024 [1]. - The cumulative surplus of the foreign exchange fund stood at HKD 8,779 billion [1]. - The investment income for the first half of 2025 was HKD 1,944 billion, with bond investment income contributing HKD 753 billion, and stock investment income from Hong Kong and other sources totaling HKD 503 billion [1]. Group 2: Investment Environment - The first half of 2025 was marked by significant volatility in global financial markets due to trade barriers, geopolitical tensions, and the unpredictable stance of the U.S. government on economic policies [2]. - Despite the challenges, there was a recovery in global stock markets as negotiations on tariffs progressed, and the U.S. Federal Reserve maintained its monetary policy targets [2]. - The HKMA emphasized the importance of a cautious and flexible management approach to the foreign exchange fund, focusing on capital preservation and long-term value enhancement [2].

Core Insights - The Hong Kong Monetary Authority reported an investment income of HKD 194.4 billion for the first half of the year [1] Investment Income Breakdown - Bond investment income contributed HKD 75.3 billion [1] - Hong Kong stock investment income amounted to HKD 22.9 billion [1] - Other stock investment income was HKD 27.4 billion [1] - Foreign currency asset valuation adjustments added HKD 56.8 billion [1] - Other investment income totaled HKD 12 billion [1] Total Assets and Surplus - As of June 30, the total assets of the foreign exchange fund reached HKD 4,297.1 billion, an increase of HKD 216.1 billion compared to the end of 2024 [1] - The cumulative surplus of the fund stands at HKD 877.9 billion [1]

Core Insights - The total assets of the Exchange Fund reached HKD 42,971 billion as of June 30, 2025, an increase of HKD 1,377 billion from the end of May 2025, with HKD assets rising by HKD 885 billion and foreign currency assets increasing by HKD 492 billion [1] Group 1: Exchange Fund Assets - The increase in HKD assets was primarily due to the month-end balance of Exchange Fund notes and bonds that were subscribed but not settled [1] - The rise in foreign currency assets was mainly attributed to interest income, market value revaluation of investments, and proceeds from the issuance of government green bonds, although this increase was partially offset by the sale of US dollars under the Currency Board system [1] Group 2: Currency Issuance Accounts - As of June 30, 2025, the monetary base was HKD 21,202 billion, a decrease of HKD 47 billion or 0.2% from the end of May 2025, primarily due to the purchase of HKD under the Currency Board system [1] - The decrease in the monetary base was partially offset by an increase in the total amount of liability certificates and the amortization of discounts on issued Exchange Fund notes and bonds [1] Group 3: Supporting Assets - The total amount of supporting assets increased by HKD 86 billion to HKD 23,648 billion, representing a growth of 0.4%, driven by interest income, market value revaluation of investments, and the issuance of liability certificates [1] - The supporting ratio rose from 110.88% at the end of May 2025 to 111.54% at the end of June 2025 [1]

Core Viewpoint - The Hong Kong Monetary Authority (HKMA) reported a strong performance of the Exchange Fund in the first half of 2025, with significant investment income despite a volatile global financial market influenced by trade tensions and geopolitical issues [1][2]. Group 1: Financial Performance - The Exchange Fund recorded an investment income of HKD 194.4 billion in the first half of 2025, with key components including bond investment income of HKD 75.3 billion, Hong Kong stock investment income of HKD 22.9 billion, and other stock investment income of HKD 27.4 billion [1]. - The total assets of the Exchange Fund reached HKD 4,297.1 billion by the end of June 2025, an increase of HKD 216.1 billion from the end of 2024, with cumulative surplus amounting to HKD 877.9 billion [1]. Group 2: Market Conditions - The global financial market experienced significant volatility due to rising trade barriers and geopolitical tensions, particularly after the U.S. government announced aggressive tariff measures in early April 2025, leading to a sharp decline in stock and bond markets [1]. - The S&P 500 index saw a decline of approximately 12% within a few days starting April 3, 2025, while the yield on 10-year U.S. Treasury bonds rose by 50 basis points to about 4.5% in a single week, marking the largest weekly change since the COVID-19 crisis in 2020 [1]. Group 3: Future Outlook - Despite the positive investment returns in the first half of 2025, the investment environment for the second half remains uncertain, with unpredictable U.S. trade policies potentially impacting international capital flows and corporate profitability [2]. - The HKMA plans to maintain a cautious and flexible management approach for the Exchange Fund, focusing on capital preservation and long-term value growth while ensuring high liquidity and diversified investments [3].