The Exchange Fund lost a record $34 billion from investments in the first nine months. The cause is a triple whammy of falling valuations for equities, bonds, and currency holdings.

Eddie Yue Wai-man, Hong Kong Monetary Authority CEO, said that this year had been a challenging time as stocks, bonds, and currencies are all experiencing substantial losses.

Global markets have been falling in the wake of the Covid-19 pandemic. Global supply chain disruption for many industries. The Inflationary spiral takes place in many countries. These problems have made the Exchange Fund difficult.

In the third quarter, the fund lost $12.8 billion. This is the second record loss in the past 19 years.

It is also only the second time in history – after the 2008 global financial crisis – that the fund has recorded three consecutive quarters  losses.

Yue said the Exchange Fund is likely to report a full-year loss.  This is the third such time in its history.

Yue had warned of a financial crisis in April. He said that the Exchange Fund would face a ‘triple-whammy’ situation with the valuations of equities, bonds, and foreign exchange ­falling at the same time.In the U.S., the S&P 500 index fell 5.3% during the third quarter to its lowest level in nearly two years. Hong Kong’s Hang Seng Index tumbled to the lowest level in 11 years.

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