| HK's monetary chief defends pegged exchange rate system |
| Friday,October 13,2006 Posted: 06:18 BJT(2218 GMT) Xinhua |
The Linked Exchange Rate system, introduced 23 years ago, continues to be a bulwark against monetary instability, Hong Kong Monetary Authority Chief Executive Joseph Yam said Thursday. In his latest Viewpoint article published on the authority's Website, Yam said the arrangement represented the first anchor for a component of the Monetary Base, and has been refined over the years, considerably ahead of time to avoid destabilizing crises. Hong Kong's pegged or fixed exchange rate system is linked with U.S. dollar and relatively stable comparing with free floating system. Joseph Yam cautioned that Hong Kong is not immune to any monetary crisis though the monetary authority has effective control of a monetary base. However, he noted, "What is important is that, in the light of changing circumstances, we should ensure that we have the necessary armory to deal with shocks in our monetary and financial systems in the best way we can." (Source: Xinhua) |
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