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Hong Kong capable of dealing with U.S. Fed interest rate hike: financial chief

A digital billboard is seen at the trading hall of Hong Kong Exchanges and Clearing Limited (HKEX) in Hong Kong, south China, Feb. 5, 2021.(Xinhua/Wang Shen)

Paul Chan, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government, said that with solid economic fundamentals, abundant fiscal reserves and a significant amount of foreign exchange reserves, Hong Kong is absolutely capable of dealing with external shocks.

HONG KONG, July 29 (Xinhua) -- Paul Chan, financial secretary of the Hong Kong Special Administrative Region (HKSAR) government, said on Thursday that Hong Kong is capable of dealing with the shock of the U.S. Federal Reserve rate hike.

The U.S. Fed on Wednesday raised the target range for the federal funds rate by 0.75 percentage point to a range of 2.25 to 2.5 percent. On Thursday, the Hong Kong Monetary Authority (HKMA) also raised Hong Kong's base rate of the discount window.

Chan said that with solid economic fundamentals, abundant fiscal reserves and a significant amount of foreign exchange reserves, Hong Kong is absolutely capable of dealing with external shocks.

Hong Kong's financial system is also mature and solid, able to handle funds inflow and outflow in a large amount, Chan said, adding that despite the U.S. tightening monetary policy in the past few months, Hong Kong's financial markets have been operating smoothly and orderly, without any chaos.

He expects that if the COVID-19 epidemic is largely under control, the economic performance of Hong Kong in the second half of this year would be better than the first half.■