Sunday, May 22

Ukraine War Risks Manageable for Hong Kong, Paul Chan Says

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(Bloomberg) — The overall risks of the war between Ukraine and Russia on Hong Kong are manageable, but the city remains “highly vigilant” for any possible impact on financial markets, Financial Secretary Paul Chan wrote in his blog on Sunday.

Ukraine accounted for 0.05% of Hong Kong’s goods exports last year, while Russia made up 0.78%, Chan said. Sharp increases in global energy prices will have a “relatively mild” effect on Hong Kong inflation because the city’s economy is dominated by the services industry and is not highly dependent on energy, according to Chan.

Hong Kong’s stock market and currency are operating in an orderly manner despite a tense geopolitical situation, the financial secretary said. The banking system has also remained stable and the city’s capital adequacy ratio as a buffer indicator is high at 20%, far exceeding the international minimum standard of 8%, according to Chan.

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