People’s Republic Of China–– Macao Special Administrative Region: Staff Report for the 2019 Article IV Consultation Discussions—Informational Annex

2019 Article IV Consultation Discussions-Press Release; Staff Report; and Statement by the Executive Director for Macao SAR


2019 Article IV Consultation Discussions-Press Release; Staff Report; and Statement by the Executive Director for Macao SAR

Fund Relations

Membership Status

As a Special Administrative Region of the People’s Republic of China, Macao SAR is not a member of the Fund. The first Article IV consultation discussions since the handover in 1999 took place during April 22–29, 2014 and the Board discussion took place in July 2014. Its Article IV is in a 24-month cycle. The latest Article IV consultation discussions took place during February 13–25, 2019. Outside of the Article IV process, the Fund has maintained a relationship with Macao SAR, focused mainly on technical assistance and training. STA provided technical assistance with compiling FSIs in 2013 and on the balance of payments in 2008, MCM completed an assessment of the financial sector regulation and supervision under the OFC program in 2002 and 2008/2009 (published in 2011), and LEG provided advice on AML/CFT issues resulting in new legislation in 2006.

Exchange Rate Arrangement

Since 1989, Macao SAR has been operating under a currency board arrangement. On April 7, 1977, the exchange rate of Macao SAR’s currency, the pataca, was formally delinked from the Portuguese escudo and linked to the Hong Kong dollar at a central rate of MOP 1.075/HK$, and the transaction rates were allowed to deviate from this rate as long as they were within a band of +/-1 percent of the central rate. Effective January 1979, the central rate of the pataca was set at MOP 1.038/HK$, and in September 1983, was adjusted to MOP 1.03/HK$, and the transaction rates were to take place within a narrow band on either side of the central rate. This arrangement continued through May 1987.

Since then, the pataca has been tied to the Hong Kong dollar at a rate of MOP1.03/HK$, and is therefore also in effect linked to the US$, at around MOP8/US$.

Notes are issued by two banks, which deliver Hong Kong dollars to the AMCM in return for noninterest bearing certificates of indebtedness, which serve as the backing for the banknote issue. The Hong Kong dollars are then counted as part of the official foreign exchange reserves held at the AMCM. Under the currency board arrangement, the pataca is 100 percent backed by foreign assets. There are no exchange restrictions on current and capital account transactions. With capital freely mobile, monetary conditions in Macao SAR are strongly influenced by conditions in Hong Kong SAR and the United States market.

Statistical Issues

(As of March 28, 2019)

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Table of Common Indicators Required for Surveillance

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Any reserve assets that are pledged or otherwise encumbered should be specified separately. Also, data should comprise short-term liabilities linked to a foreign currency but settled by other means as well as the notional values of financial derivatives to pay and to receive foreign currency, including those linked to a foreign currency but settled by other means.

Both market-based and officially-determined, including discount rates, money market rates, rates on monetary bills.

Macao SAR has no government debt.

Goods trade data from external statistics are available are provided monthly. Services trade data in BOP format are released annually with the current account statistics.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).