Macau Monetary Authority (AMCM) President Anselmo Teng Lin Seng said Tuesday he will reveal details of the government’s planned setting-up of an investment development fund in the fourth quarter of this year.
Teng made the announcement on the sidelines of Tuesday’s annual spring reception in the quasi-central bank’s garden.
Chief Executive Fernando Chui Sai On said last month in his 2015 Policy Address that the government would study the feasibility of setting up an investment development fund with a portion of the government’s financial reserves. Chui also said he hoped the fund will be a means to improve the reserves’ returns.
Asked by reporters about the fund and possible investment strategies, Teng said that nothing had been decided as yet.
“We will do our best to come up with a concrete proposal [for the setting-up of the fund] in the fourth quarter [of this year]… but there has been no decision yet on how much [of the government’s financial reserve] will be put into the fund,” Teng said, adding that the AMCM will adhere to the principles of safety and efficiency when investing the government’s financial reserves.
Teng also said the government would work in conjunction with the central government’s national development strategy – “One Belt, One Road” – and the development strategy for the Asian Infrastructure Investment Bank (AIIB) when considering possible investment projects.
The “One Belt, One Road” concept refers to the Silk Road Economic Belt and 21st Century Maritime Silk Road initiatives raised by President Xi Jinping during his state visit to Indonesia in 2013.
Teng also said that by the end of last year the Macau Special Administrative Region’s (MSAR) total financial reserves stood at 246.3 billion patacas while the foreign currency reserves amounted to 131.4 billion patacas.
The International Monetary Fund (IMF) has said that the foreign exchange indexation of Macau’s pataca to the Hong Kong dollar, and indirectly to the US dollar, is the “most appropriate system”, the head of Macau’s monetary Authority said on Tuesday.
Anselmo Teng said the conclusions of the IMF assessment report conducted in 2014, advised Macau to maintain the indexation with the HK dollar and strive for “prudent financial reserve management”.
In late March, the economy and finance secretary, Lionel Leong, said the government wanted to lift “the preliminary restrictions in trading in yuan, offering support to financial institutions wanting to expand outside the territory”, which led some analysts to consider this a step towards the extinction of the pataca and to index the local currency to the Chinese one.
Macau’s economy is based on services with the tourism sector, particularly casino gaming as its casinos are the regional government’s main source of revenue as it charges a 35% direct tax on gross takings, plus an indirect tax of nearly 4%. (macaunews/macaupost)