IMF commends Hong Kong’s financial system resilience

International Monetary Fund’s (IMF) Staff Mission lauded the resilience of Hong Kong’s financial system and LERS (Linked Exchange Rate System) in the Concluding Statement of the IMF Mission published on 4 December.

According to IMF, the country’s financial system and a history fo prudent macroeconomic policies has provided it with significant buffers to navigate through cyclical and structural challenges despite a slowing economy.

The IMF’s Concluding Statement notes that Hong Kong’s economic activity has weakened significantly in 2019 and fell into a technical recession in the third quarter.

The Mission also expressed support for the Government’s various policies to support the economy and safeguard financial stability.  It further noted the LERS is an appropriate arrangement for Hong Kong underpinning the stability of its highly open economy and globally integrated monetary and financial system.

Hong Kong was also commended for strengthening its regulatory and supervisory framework for safeguarding financial stability as well as its “solid” anti-money laundering and counter-terrorist financing system.

Hong Kong financial secretary Paul Chan welcomed the recognition of the country’s policy framework and economic buffers.

“I am glad that the IMF supports the relief measures we formulated earlier to cope with the economic challenges. We will stay vigilant and monitor the economic situation closely. We are prepared to roll out further relief measures if necessary,” he said.

HKMA (Hong Kong Monetary Authority) chief executive Eddie Yue said that the IMF’s vote of confidence about the LERS boosts its importance as an “anchor of monetary and financial stability in Hong Kong.

IMF’s Staff Mission and visited Hong Kong between October 23 to November 4 this year for its 2019 Article IV Consultation with the country.

Source: Regulation Asia