What Is a Monetary Authority?

The Hong Kong Monetary Authority (HKMA, Hong Kong Monetary Authority) is an independent department under the Government of the Hong Kong Special Administrative Region of the People's Republic of China. It is responsible for Hong Kong's financial policy and banking and currency management. It plays a role similar to a central bank and directly reports to the central bank. The Financial Secretary is in charge.

Hong Kong Monetary Authority

The HKMA's policy objectives are:

In contact

Ethics and discipline

Human Resources

Working at the HKMA

The HKMA attaches great importance to the conduct of its employees.

Visit at the Hong Kong Monetary Authority

Exchange Fund Advisory Committee

The Financial Secretary has heard the advice of the Exchange Fund Advisory Committee on his exercise of control over the Exchange Fund. The Exchange Fund Advisory Committee was established in accordance with section 3 (1) of the Exchange Fund Ordinance. The provision stipulates that the Financial Secretary must consult the Exchange Fund Advisory Committee when exercising control of the Exchange Fund. The Financial Secretary is the ex officio chairman of the Exchange Fund Advisory Committee, while other members (including the Monetary Authority) join as individuals and are appointed by the Financial Secretary under the authority of the Chief Executive of the Hong Kong Special Administrative Region. The members were appointed with their own expertise and experience, which benefited the Exchange Fund Advisory Committee.

This expertise and experience spans the fields of currency, finance, economics, investment, accounting, management, business and law. The Exchange Fund Advisory Committee advises the Financial Secretary on the investment policies and strategies of the Exchange Fund, and the development of financial infrastructure projects such as those funded by the Exchange Fund. As the HKMA's operating costs and staff costs are also funded by the Exchange Fund, the committee will also advise the Financial Secretary on the HKMA's annual administrative budget and the terms and conditions of service of HKMA staff. The Exchange Fund Advisory Committee meets regularly and, if special advice is required, it will also meet. There are five special committees under the Exchange Fund Advisory Committee, which are responsible for monitoring the work of specific sections of the HKMA, and report and make recommendations to the Financial Secretary through the Exchange Fund Advisory Committee. The Exchange Fund Advisory Committee held six regular meetings in 2005 to discuss various matters related to the work of the HKMA, most of which have been discussed in advance by the relevant special committees. In addition, the Exchange Fund Advisory Committee held a special meeting in May to discuss measures to optimize the linked exchange rate system introduced on May 18, 2005.

The Governance Committee monitors the performance of the HKMA and makes recommendations to the Exchange Fund Advisory Committee on remuneration and conditions of service, human resources policies and budgets, and administrative and governance matters. The committee held 7 meetings in 2005, covering the disclosure of the HKMA's expenditure budget, the HKMA's performance in 2004, the 2005 annual remuneration review, the HKMA's 2004 Annual Report, continuous operation planning, Strategic planning matters and the HKMA's budget for 2006. The HKMA also regularly submits work reports to the Commission.

The audit committee reviewed whether the HKMA's financial reporting procedures and internal controls were adequate and effective and submitted a report. The Audit Committee is responsible for reviewing the HKMA's financial statements and the constituent items and accounting principles used in the preparation of these statements, in conjunction with external and internal auditors, to review the scope and results of the audits it conducts. The committee held three meetings in 2005. In addition to regular reports, the Committee reviewed a consultancy study on the implementation of Hong Kong Financial Reporting Standards during the year and assessed the impact of the standards on the Exchange Fund's accounts.

The Currency Board monitors and reports on the operation of the currency board system, which is the backbone of Hong Kong's linked exchange rate system. The committee's work includes ensuring that the currency board system operates in accordance with established policies, making recommendations to improve the system, and ensuring that the system operates with a high degree of transparency. The HKMA regularly publishes the minutes of the currency board meeting and submits monthly reports on the operation of the board's currency board system. The committee held six meetings in 2005. The topics of the meeting included the Mainland China currency status index, the exchange balance arrangement and market operations within the scope of exchange, the mutual transfer of the certificate of liability and the summary balance, and the new RMB exchange rate formation mechanism and its impact on Hong Kong.

The Investment Committee monitors the investment management of the HKMA and makes recommendations on the investment policies and strategies of the Exchange Fund, as well as risk management and other related matters. The committee held 6 meetings in 2005 to advise on the investment strategy of the Exchange Fund and related issues.

The Financial Infrastructure Commission oversees the HKMA's work in the development and operation of Hong Kong's financial infrastructure, and makes recommendations on the methods and measures adopted by the HKMA in fulfilling its responsibility to promote the safety, efficiency and development of Hong Kong's financial infrastructure. The committee held 4 meetings in 2005. The topics of the meeting included the review of the development of financial infrastructure, the progress of projects and business development derived from the implementation of the review, and the establishment of the Treasury Market Association.

Banking Advisory Committee

The Banking Advisory Committee was established in accordance with section 4 (1) of the Banking Ordinance to advise the Chief Executive of the Hong Kong Special Administrative Region on matters relating to the Banking Ordinance, particularly with regard to banking and the conduct of banking business. The Committee is chaired by the Financial Secretary and includes the Monetary Authority and other persons appointed by the Financial Secretary under the authority of the Chief Executive.

Deposit-taking Companies Advisory Committee

The Advisory Committee on Deposit-taking Companies was established under Section 5 (1) of the Banking Ordinance to address matters relating to the Banking Ordinance, in particular matters relating to deposit-taking companies, restricted license banks and the operation of deposit-taking Advice to the Chief Executive of the Hong Kong Special Administrative Region. The Committee is chaired by the Financial Secretary and includes the Monetary Authority and other persons appointed by the Financial Secretary under the authority of the Chief Executive of the Hong Kong Special Administrative Region.

President committee

The Chairman's Committee is chaired by the President of the HKMA and its members include the vice president and assistant president of the HKMA. The presidential committee meets once a week to report to the president on the progress of the major work of the various departments of the HKMA and to advise the president on policy matters related to the operation of the HKMA.