Rare move to take income out of Exchange Fund to pay for Northern Metropolis, other big projects

South China Morning PostCenter-RightEN 1 min read 100% complete by Lam Ka-singFebruary 25, 2026 at 06:12 PM

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The Hong Kong government anticipates a consolidated surplus, its first in four years, due to increased revenue and fund transfers. As part of this, Financial Secretary Paul Chan announced a rare transfer of HK$75 billion from the Exchange Fund's investment income to the Capital Works Reserve Fund in each of the next two financial years, totaling HK$150 billion. This move, last done in 1984, will help finance the Northern Metropolis project and other infrastructure developments. Additionally, HK$15.8 billion will be brought back from funds outside government accounts, and HK$37 billion will be transferred from the Bond Fund surplus. The government projects another surplus for 2026-27, building on the expected surplus for the 2025-26 financial year.

Key Entities & Roles

Key Player Opposition Context

Legislative Council 40% Capital Works Reserve Fund 50% Northern Metropolis 60% Paul Chan Mo-po 75% Exchange Fund ×685% Hong Kong ×390%

Keywords

exchange fund 100% budget surplus 90% northern metropolis 80% fund transfers 70% government revenue 70% investment income 60% infrastructure projects 60% hong kong 50% financial year 50%