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Following is the transcript (English portion) of the media session given by the Acting Financial Secretary, Miss Denise Yue, after attending the Special Meeting of the Finance Committee today (March 23):

Question: (...... whether the public thinks it is in the best interest of the public to invest its money in the way as the Government is using it now)

Ag FS: Hong Kong is a free society, people have different views on different subjects and we do listen to the views expressed to us and we proactively reach out for views and this is why the Financial Secretary undertakes rounds of consultation before he finalises each year's Budget. In terms of the level of fiscal reserves, the Government believes it is in the public interest to maintain a reasonable level of fiscal reserves and the benchmark for determining what is a reasonable level is explained in the Financial Secretary's 1998 Budget Speech. Experience tells us particularly in 1998 that when something very exceptional happens to the market, the Government may well have to use in one go over $100 billion of fiscal reserves. That was exactly what happened in August 1998 when the Financial Secretary, within 11 days, deployed over $100 billion of our fiscal reserves to incur into the market. But that is not to say we do not derive any investment return from our fiscal reserves. We do. We place most of our fiscal reserves with the Hong Kong Exchange Fund and each year they give us a sizeable investment return ranging from $30 billion to $40 billion every year and we do use the return received every year to pay for part of Government's expenditure.

Question: (about the current level of fiscal reserves)

Ag FS: The current level? It is around $430 billion.

(Please also refer to the Chinese transcript.)

End/Friday, March 23, 2001

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