Hong Kong’s Paul Chan defends city’s currency peg to US dollar in Davos
Finance chief says important to offer stability for the business environment, as volatility expected in capital markets during Trump presidency
Hong Kong’s finance chief has sought to defend the city’s currency peg to the US dollar in a meeting at the World Economic Forum in Davos, saying it was important to offer certainty for the business environment.
The defence by Paul Chan Mo-po came in a panel discussion on Thursday with other financial leaders, towards the end of his five-day trip to the global forum.
“Our dollar peg to the US dollar [has been in effect] since 1983, it has served us very well,” the financial secretary said when asked by the moderator why Hong Kong did not peg its currency to the renminbi when the city was closer to mainland China.
“Hong Kong being an international financial centre, we don’t have any exchange control, money coming in and going out freely, any time. So providing that kind of certainty is very important.”
Chan was speaking in a discussion on “stemming financial fragmentation”. He said a key priority for Hong Kong was to maintain financial stability as the capital market was expected to be more volatile in light of the new US administration under President Donald Trump.
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“But there are also opportunities,” he said, citing a recent survey that found about a third of US companies in Hong Kong were positive about its future and intended to expand operations.
