Exco approves $150b Exchange Fund transfer

The Executive Council on Tuesday approved plans to transfer HK$150 billion from Hong Kong's main financial war chest to a fund supporting capital works, with the government assuring that the move is "an exceptional arrangement". Proposed after the Exchange Fund delivered a record-breaking investment income, the move will see the money put into the Capital Works Reserve Fund over two fiscal years to support the development of the Northern Metropolis and other infrastructure projects. The administration said the transfer will be made through a designated account, with HK$75 billion credited to the capital works fund's account annually starting from the 2026-27 financial year. Financial Secretary Paul Chan, in his latest budget speech, had assured that the transfer would be done on the premise that there would be no compromise in the Exchange Fund's function to maintain the stability and integrity of local monetary and financial systems. A government spokesperson stressed that the transfer is "an exceptional arrangement and not a recurring measure". "All funds will be used for infrastructure projects for long-term investment with a view to accelerating and increasing development capacity rather than for the government's operating expenditure," the spokesperson said. The relevant arrangement will be implemented after the Legislative Council passes the Appropriation Bill 2026. Edited by Aaron Tam