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HONG KONG/US DOLLAR LINK
CONTRIBUTION TO STABILITY
Since October 1983, the Hong Kong/US dollar link has brought
about stability and maintained confidence by creating a predictable financial framework. Any change in the link would be a matter for the Hong Kong Government. They have expressed the conviction that
such an action would cause uncertainty and speculation in the years
ahead, which could seriously harm Hong Kong.
INTENTIONS OF HONG KONG GOVERNMENT
The Hong Kong Government have repeatedly stated their intention
to maintain the link at the current level.
MEASURES TO DISCOURAGE SPECULATION
The introduction of a "specified rate" by the Hong Kong
Association of Banks is designed to deter currency speculation.
Although not a government measure, it is clearly in line with the
government's policy of maintaining the link at the current level.
RISK OF PROTECTIONIST MEASURES AGAINST HONG KONG
The merits of Hong Kong's case are clear. Hong Kong's overall
trade remains more or less in balance. There is no question of the link being used to create unfair trade advantages. Furthermore Hong Kong operates an open trade regime fully in accordance with the
General Agreement on Tariffs and Trade. Any protectionist measures
against Hong Kong in retaliation against maintenance of the present dollar link would be patently unjust and unjustified.
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