Fiscal Reserves record 40 percent growth

The overall size of the Fiscal Reserve recorded an annual growth of around 40 percent at the end of 2015, the Monetary Authority of Macau (AMCM) said in a statement, reaching the preliminary figure of MOP345.05 billion.
The total reserve recorded an investment return of MOP2.41 billion; an annualized rate of return of 0.7 percent for the year.
The authority says that the significant growth in the reserve has been used to further diversification amongst global assets in order to allow for a better medium to long term risk and return tradeoff. It now includes foreign exchange reserves mostly denominated in USD, HKD and RMB.
According to AMCM, “the long awaited rate hike by the US Federal Reserve sent the USD stronger during the year, while China implemented stabilizing monetary policies in order to boost the economy.” Pressure from a dwindling rate differential versus the USD further weakened the Yuan. Total revaluation loss from currency exposure amounted to MOP5.31 billion for 2015.
However investments in other areas, such as the fixed income market, the equity markets, and the money market (including the bonds market) saw positive returns, contributing to a net income in reserves.
The AMCM stated in a press release issued yesterday that it “will continue to pursue the investment philosophy that emphasizes safety, stability and prudence.” The statement adds; “AMCM will effectively manage the reserve investment on the basis of a comprehensive analysis of the relevant risk-return tradeoff. “