Macau government plans to apply more financial reserves in Chinese yuan

9 January 2013

The Monetary Authority of Macau is planning to apply more of its resources to financial applications in yuan and plans to exceed the current limit of 10 billion patacas (US$1.25 billion) set by China’s central bank, the chairman of the Monetary Authority said Tuesday.

In response to questions asked by members of the Legislative Assembly about the strategy to be employed and the returns on these financial applications, Anselmo Tang said more “aggression” and diversification of investments was needed, including applying some of Macau’s financial reserves “in other higher risk packages.”
According to figures published in December 2012 Macau’s foreign reserves totalled 131.8 billion patacas (US$16.51 billion) at the end of November, falling 1.5 percent or 2.0 billion patacas against the previous month when reserves totalled 133.9 billion patacas (US$16.77 billion).

At the end of November the territory’s reserves were 19 times the monetary mass in circulation as measured by the M1 aggregate.
Assembly member and businessman Chan Chak Mo said that application of reserves was “conservative” and argued that the rate of return would likely not be enough to cover inflation.

Anselmo Tang said that the rate of return stood at 1.5 percent and most applications were in currencies and bonds.

Figures published by the region’s Statistics and Census Bureau showed that the inflation rate in Macau in November totalled 6.19 percent, whilst year on year inflation totalled 5.72 percent. (macauhub)