The "Budget" foreign exchange fund will transfer a total of HKD 150 billion to the Capital Works Reserve Fund over the next two financial years to support infrastructure development

The Financial Secretary, Paul Chan, pointed out that the investment performance of the Exchange Fund reached a historical high last year, with annual investment income reaching HKD 330 billion. By the end of last year, the total assets of the Exchange Fund exceeded HKD 4.1 trillion, a scale sufficient to maintain the monetary and financial stability of Hong Kong. Therefore, he suggested, in accordance with the Exchange Fund Ordinance, to transfer HKD 150 billion from the Exchange Fund to the Capital Works Reserve Fund in the next two fiscal years, with HKD 75 billion allocated each year, to support the Northern Metropolis and other infrastructure projects, without affecting the Exchange Fund's ability to maintain the stability and soundness of Hong Kong's monetary and financial system.

He noted that the bond fund has always been outside the government's consolidated accounts, aimed at supporting the issuance of silver bonds, inflation-linked bonds, alternative bonds, etc., under the "Government Bond Program." Among them, silver bonds will be issued under the "Infrastructure Bond Program" starting in 2024, with the bond issuance income stored in the Capital Works Reserve Fund. Most of the bonds issued under the "Government Bond Program" will mature and be repaid by the end of the year.

As of the end of March, the bond fund's surplus is expected to exceed HKD 150 billion, with a cumulative surplus of approximately HKD 37 billion after deducting the outstanding bond balance and interest expenses. To make good use of the bond fund surplus, the government will submit a resolution to the Legislative Council to transfer the cumulative surplus of the bond fund to the government's consolidated accounts in the 2026/27 fiscal year