Secretary for Economy and Finance Lionel Leong Vai Tac pledged on Monday that the government will strive to improve the performance of investments that it makes from its financial reserves, while always adopting a prudent approach.
Leong made the remarks while speaking to reporters on the sidelines of an event to celebrate the 9th anniversary of the Alliance for Common People Building Up Macau, at The Plaza Restaurant in Zape.
The Macau Monetary Authority (AMCM) said in a statement last week that until the end of last year the government had total financial reserves of MOP 438.7 billion.
Last week’s AMCM statement said that the government recorded investment gains of MOP 3.31 billion last year by investments from its financial reserves – an annual return of 0.8 percent – as compared to the 0.7 percent recorded in 2015.
When asked by the media about the investment performance of the government’s financial reserves, Leong said he would request the Macau Monetary Authority to make adjustments to the 2017 investment portfolio in accordance with this year’s economic situation that it has forecast.
Leong said the government would continue to make investments from its financial reserves in a prudent way while pursuing a reasonable return rate.
“The government’s financial reserves come from residents’ pockets. First of all, the money should be used in a safe way, meaning that the risk should be controllable [when making investments]. On the other hand, we should also pursue a reasonable return [rate],” said Leong.
Leong also said that the government was using a number of professional investment funds for investing some of its financial reserves, adding that some 11 percent of its financial reserves were being invested in this way last year.
Leong said the government would study whether it should raise the ratio for such investment funds to make investments from its financial reserves, adding that professionals working for such funds were more familiar with the latest financial market situation.
Leong was quick to add that investing in a prudent way was the most important principle for the government to make investments from its financial reserves.
When asked by the media about the possible impact on the city from a possible rate rise cycle by the US Federal Reserves, Leong said that the cycle may lower tourists’ purchasing power, such as visitors from the mainland. He said this was because the yuan might depreciate relative to the local currency which is indirectly pegged to the US dollar through the Hong Kong dollar.
Leong said if this happened, it might negatively affect the local economy which, he pointed out, has been recovering recently.