The Monetary Authority of Macau says it expects an increase in US interest rates to “substantially affect” the value of the Macau government’s fiscal reserve. Last year the fiscal reserve amounted to almost MOP250 billion (about US$31.25 billion). A report by the authority says a rise in US interest rates this year will make bond markets, stock markets and exchange rates around the world volatile. The pataca is indirectly pegged to the US dollar and 47 per cent of the fiscal reserve is held in bonds – mainly US dollar and renminbi bonds – making the reserve vulnerable to changes in US interest rates.
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