Hong Kong's HK$407.9bn surplus: where the money goes, and why the HKD sat near 7.85

“Hong Kong earns hundreds of billions a year, so why doesn’t the Hong Kong dollar go up?” The answer has two parts. First, the HKD is pegged to the US dollar and can only trade between 7.75 and 7.85. Second, most of what Hong Kong earns is invested abroad again. This note uses the Census and Statistics Department’s balance of payments figures to show how large the surplus is, where the money goes, and where those flows appear under the peg.

How large is Hong Kong’s current account surplus?

Large, and not mainly from selling goods. Hong Kong’s current account surplus was HK$407.9 billion in 2025, and HK$96.0 billion in the second quarter of 2026, equal to 11.4% of GDP (C&SD, 21 September 2026). When C&SD first published the 2025 full-year figure in March it was HK$406.6 billion, or 12.2% of GDP (release of 20 March 2026); it has since been revised.

Hong Kong's current account surplus in 2025 (C&SD balance of payments Table 1, revised September 2026)

Visual guide

How large is Hong Kong’s current account surplus?

H1 2026

• Current account+134.5
• Goods-152.7
• Services+94.7
• Primary income+205.4
• Secondary income-12.9

-152.7205.4

Item (HK$ billion)	2025	H1 2025	H1 2026	Q2 2026
Current account	+407.9	+217.8	+134.5	+96.0
Goods	-73.2	-41.7	-152.7	-59.1
Services	+170.1	+85.6	+94.7	+38.5
Primary income	+334.4	+186.7	+205.4	+123.7
Secondary income	-23.5	-12.8	-12.9	-7.0

Source: C&SD Tables 1 and 2; half-year figures are the sum of two quarters (calculated).

The main driver is primary income: what Hong Kong residents earn on direct, portfolio and other investments abroad, minus what non-residents earn in Hong Kong. Net primary income of HK$334.4 billion in 2025 was equal to about 82% of the current account surplus (calculated), and the services surplus was HK$170.1 billion; goods on a balance of payments basis ran a deficit of HK$73.2 billion. In the first half of 2026 the goods deficit widened to HK$152.7 billion and the current account surplus was about HK$83.3 billion smaller than a year earlier (calculated).

With a surplus this large, did the HKD appreciate?

Not on any sustained basis, because the peg does not allow it. The HKMA undertakes to sell HKD at 7.75 and buy HKD at 7.85 (HKMA: how does the LERS work?). The table sets each quarter’s current account next to the change in reserve assets in the balance of payments and the HKD’s monthly averages.

Quarter	Current account (HK$ bn)	Change in reserve assets (HK$ bn)	Range of HKD monthly averages	HKMA Convertibility Undertaking operations
Q1 2025	+124.7	-85.4	7.7728–7.7852	None
Q2 2025	+93.1	+105.5	7.7631–7.8486	Strong side 4 times in early May; weak side from 26 June
Q3 2025	+95.1	-136.5	7.7847–7.8496	Weak side until mid-August (12 times in total)
Q4 2025	+95.0	+46.5	7.7745–7.7808	None
Q1 2026	+38.5	+35.2	7.7965–7.8268	None
Q2 2026	+96.0	+54.6	7.8329–7.8377	None

Sources: current account and reserve assets from C&SD Table 1; HKD monthly averages from Federal Reserve H.10 via FRED; Convertibility Undertaking operations from HKMA reports and the HKMA Annual Report 2025 highlights.

The current account was in surplus every quarter, yet the HKD leaned toward the weak side in the second and third quarters of 2025 and in the second quarter of 2026. For a floating currency that combination would show up in the exchange rate; in Hong Kong it shows up in reserve assets and the Aggregate Balance. Reserve assets rose by HK$105.5 billion in the second quarter of 2025, in the same direction as the HKMA selling HKD for US dollars on the strong side in early May, and fell by HK$136.5 billion in the third quarter, in the same direction as the HKMA buying HKD with US dollars on the weak side. The two sets of figures are defined differently and should not be matched dollar for dollar.

Where does the money go?

Mostly into foreign securities. C&SD compiles the accounts to the IMF’s sixth Balance of Payments Manual: in the financial account a positive asset figure means Hong Kong residents made net purchases of foreign assets (money going out); a positive liability figure means non-residents made net investments in Hong Kong (money coming in); the net figure is assets minus liabilities, so a positive net figure is a net outflow (C&SD Table 3).

Item (HK$ billion)	2025	H1 2026	What it means
Portfolio investment: assets	+980.2	+1,182.1	Residents’ net purchases of foreign shares and bonds
of which equity and investment fund shares	+485.9	+275.7	Foreign shares and funds
of which debt securities	+494.3	+906.5	Foreign bonds
Portfolio investment: liabilities	+492.4	+168.9	Non-residents’ net purchases of Hong Kong shares and bonds
Direct investment: assets	+778.4	+496.6	Hong Kong companies investing abroad
Direct investment: liabilities	+943.3	+639.9	Foreign companies investing in Hong Kong
Other investment: assets	+1,186.8	+640.0	Deposits placed and loans made abroad, mainly by banks
Other investment: liabilities	+839.2	+1,376.8	Deposits placed in and loans made to Hong Kong by non-residents
Financial derivatives (net)	-46.4	-93.1
Financial non-reserve assets (net)	+624.1	+40.1	Net outflow after all of the above
Reserve assets	-69.9	+89.8	Transactions in foreign reserves
Net errors and omissions	+146.8	-4.4	Statistical discrepancy

Hong Kong residents' net purchases of foreign securities in 2025, 2.4 times that year's current account surplus (C&SD Table 3; multiple calculated from the table)

Three points stand out.

First, residents buy far more foreign securities than the current account earns. In 2025 it was 2.4 times the surplus; in the first half of 2026 the HK$1,182.1 billion was about 8.8 times the HK$134.5 billion surplus for the same period (calculated). Residents’ purchases of US and other foreign shares are also the background to US stock returns in Hong Kong dollars.

Second, large sums come in at the same time. In the first half of 2026 other investment liabilities rose by HK$1,376.8 billion, of which HK$864.6 billion was currency and deposits (sum of two quarters in Table 3): non-residents placing money with Hong Kong banks. In direct investment, foreign companies invested more in Hong Kong than Hong Kong companies invested abroad, a net inflow of HK$164.9 billion in 2025.

Third, this is the typical shape of a financial centre: money flows in and out in large amounts and the net figure is the difference between two big numbers. C&SD notes that Hong Kong’s net external financial assets were HK$19,413.7 billion at the end of the second quarter of 2026, 5.7 times GDP.

How does the HKMA explain the weak HKD?

The HKMA attributes the drift to the weak side mainly to interest rate gaps and market demand for HKD funding, not to trade. When the weak-side undertaking was first triggered in June 2025, Chief Executive Eddie Yue said the strong-side triggers in early May had brought in HK$129.4 billion, pushing HKD interbank rates down and widening the HKD–USD rate gap, which encouraged carry trades selling HKD for US dollars; demand for HKD had also fallen with the peak of the dividend season, the conversion and repatriation of HKD proceeds from IPOs and bond issues by non-local companies, and the end of half-year funding preparations (HKMA, 26 June 2025).

The weak-side undertaking was then triggered 12 times from late June to mid-August, the HKMA bought HK$119.95 billion, and the Aggregate Balance fell to about HK$54 billion; after mid-August the HKD strengthened as short-term HIBOR firmed and net buying through Southbound Stock Connect continued (HKMA Currency Board Sub-Committee record).

In 2026 the HKMA reported that HKD interest rates below their US dollar peers again encouraged carry trades and weakened the HKD, but that the Convertibility Undertakings were not triggered from 30 December 2025 to 22 June 2026 and the Aggregate Balance was stable at about HK$54 billion (June 2026 record, August 2026 record). The rate gap remains: on 17 September 2026 the HKMA reported the average of overnight and one-month HIBOR at 2.50%, while the lower end of the US federal funds target range was 3.75% after the 16 September hike (HKMA).

What to watch next

• The HKMA’s monthly Currency Board Account: the balance of the banking system was HK$54.1 billion at the end of July (end-July 2026); the August figures are scheduled for release on 30 September 2026 under the HKMA’s timetable.
• The HKMA Currency Board Sub-Committee’s operations report for the period after 22 June, which has not yet been published.
• C&SD’s balance of payments figures for the third quarter of 2026; last year’s third-quarter figures were released on 22 December 2025.

This site does not forecast exchange rates or next quarter’s figures.

Limits of these numbers

• Balance of payments figures are preliminary and are revised. The current account surplus for the first quarter of 2026 was HK$36.4 billion when published in June and HK$38.5 billion after the September revision.
• Goods in the balance of payments are recorded on change of ownership and include merchanting (net exports of HK$59.5 billion in the second quarter of 2026), so they are on a different basis from customs-based merchandise trade figures.
• Net errors and omissions were HK$146.8 billion in 2025, a sizeable amount, so the components do not add up exactly.
• The financial account records transactions and excludes valuation changes from prices and exchange rates. Changes in reserve assets and HKMA Convertibility Undertaking operations are defined differently.
• Hong Kong publishes balance of payments data quarterly only; there are no monthly figures.

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