Fiscal reserves recorded loss of MOP2.9 billion in 2018

The fiscal reserve of the Monetary Authority of Macau (AMCM) registered losses amounting to some MOP2.9 billion in (USD360 million) in 2018, corresponding to negative growth of 0.6 percent. A report published yesterday in the Official Gazette attributed this to difficult international financial conditions.

However, despite such conditions, the financial reserve saw continued growth in 2018, rising from MOP490 billion at the start of the year to about MOP508.8 billion at year-end. This was made up of MOP147.6 billion in the basic reserve and MOP361.2 billion in the extraordinary reserve.

The AMCM wrote in the Official Gazette that “there was an adverse environment and more difficult investment conditions in the international financial market [in 2018], which had not been seen since the 2008 financial crash.”

“In this situation, the financial reserve adopted a number of measures for risk control and preventative measures, which effectively minimized the accounting losses.”

The AMCM said that most of its investments from the financial reserve focused on the traditional money market, involving the U.S. dollar, the Chinese yuan and the Hong Kong dollar. It said that “timely exchange rate hedging” was performed to accommodate a 4.4 percent rise in the U.S. dollar index over the course of 2018, as well as a significant depreciation in the onshore and offshore yuan.

In summary, it said that “the return performance of all asset classes in 2018 was more favorable than the market benchmark.”