The local government earned 28.98 billion patacas last year from investing its financial reserves, representing an annual return of 5.2 percent, the Macau Monetary Authority (AMCM) has announced.
At the end of last year, according to an AMCM statement on Wednesday, the Macau Special Administrative Region’s (MSAR) financial reserves stood at 580.47 billion patacas, consisting of basic reserves of 152.06 billion patacas and extraordinary reserves of 428.41 billion patacas.
According to the law on the MSAR’s financial reserves, the reserves consist of basic and extraordinary reserves. According to the law, the Macau Monetary Authority – the city’s quasi-central bank – is responsible for the management of the MSAR’s financial reserves, as well as for investing the financial reserves.
The statement underlined that while last year’s global financial market was hit by the world’s major central banks continuing with contractionary monetary policies, as well as by the continuation of geopolitical conflicts, the MSAR’s financial reserves were able to enjoy a gain thanks to the local government’s “prudent and flexible” investment management.
The statement said that while various economies worldwide have been working intensively to promote economic recovery since early last year when COVID-19 pandemic curbs were completely lifted, major central banks worldwide were continuing with their contractionary monetary policies to curb inflation by further raising interest rates.
The statement said that the global inflation pressure began to go down in the second half of last year, but certain central banks continued with a relatively high interest rate. In addition, the world’s geopolitical conflicts continued unabated.
All these adverse factors brought “gloom” to last year’s global financial market, the statement said.
With the “complexity and dynamics” of the global financial market last year, the statement said, the local government adopted “prudent” strategies in investing its financial reserves, including by strictly managing the respective investment risks.
The statement noted that the local government last year continued to allocate a relatively high ratio of low-risk assets, namely money-market and bond-market investments, to the investment portfolio of the MSAR’s financial reserves. In addition, the local government also adjusted the portfolio of listed stocks last year, the statement said.
Consequently, the statement said, the local government was able to make a gain last year in investing its financial reserves.
In 2022, the government recorded a loss of 20.75 billion patacas from investing its financial reserves, representing an annual negative return of 3.4 percent.
This poster provided by the Macau Monetary Authority (AMCM) on Wednesday explains its last year’s performance in investing Macau’s financial reserves.
