HONG KONG (May 6): Hong Kong's Exchange Fund, used to back the Hong Kong dollar, posted an investment income of HK$54.3 billion (US$6.95 billion) in the first quarter of 2024 for a second consecutive quarter of gains, the Hong Kong Monetary Authority (HKMA) said on Monday.

That compared with a revised investment income of HK$108 billion in the same period a year earlier, and a revised investment income of HK$120.1 billion in the fourth quarter of 2023.

The fund racked up an investment loss of HK$10.5 billion in the third quarter.

During the first quarter, the exchange fund recorded an investment income of HK$25.1 billion in bonds, as compared with HK$71 billion investment income in the fourth quarter.

It also posted an investment loss of HK$2.3 billion in Hong Kong equities during the quarter, as compared with a HK$5 billion loss in the fourth quarter.

"The high interest rate environment may last for some time," HKMA chief Eddie Yue told the city's lawmakers in a panel on financial affairs. He also urged the public to better manage risks arising from a delay in expected US interest cuts when making borrowings decisions.

The HKMA is the key manager of the territory's de-facto sovereign fund, which is under the control of the financial secretary and invests in equities, bonds, foreign exchange, and other securities and assets.