CE Defends Linked Exchange Rate To The US Dollar

The Chief Executive Carrie Lam has spoken out in defence of the Hong Kong dollar's peg to the US dollar, saying there are no plans to change it.

Speaking at a China Development Forum online briefing session, she said she would like to take the opportunity to squash any rumour surrounding Hong Kong's linked exchange rate system.

"The system has served Hong Kong and the world well since it was implemented in 1983, and it will continue to do so. We do not need the United States' approval to implement the system," she said.

"We also have the ability to defend it from any malicious attack, given the robust health of the Hong Kong banking sector, and the US$440 billion in our foreign exchange reserve. That, by the way, is more than twice our monetary base."

Although the Hong Kong dollar is not under any immediate pressure, there have been concerns that the US might impose financial sanctions against Hong Kong officials because of Beijing's decision to impose a national security law on the SAR.

Media reports have said that, in an extreme scenario, the US could stop Hong Kong and Chinese financial institutions from using US dollar payment and clearing systems.