Former Hong Kong cbank chief recommends possible monetary system changes
June 12 (Reuters) - Former Hong Kong Monetary Authority chief Joseph Yam has outlined possible measures to strengthen the city's monetary system, suggesting a fixed exchange rate cannot be an end in itself.
The recommendations immediately sparked fresh speculation about how much longer the global financial centre will stick to its currency peg to the U.S. dollar, which was adopted in 1983.
Yam, who retired as head of Hong Kong's de facto central bank three years ago, was speaking in his private capacity as a professor at the Chinese University of Hong Kong.
He outlined three possible refinements:
- widening meaningfully or simply removing the Hong Kong dollar's convertibility zone or turning it into a corridor for the exchange rate against the U.S. dollar or China's remnimbi, or an undislcosed basket of currencies
- Possibly doing away with the exchange rate target or zone and focusing on managing domestic monetary conditions
- Possibly was unifying "two different Convertibility Undertakings for the two elements of the monetary base, namely the bank notes in circulation and the Aggregate Balance".
Yam is an executive vice president at the China Society for Finance and Banking at the People's Bank of China.
The last major change to the currency regime was in 2005, when the trading band for the Hong Kong dollar was widened to 7.75/7.85 per U.S. dollar.
(Reporting By Anne Marie Roantree)
- Housing, jobs data weaken, but overall economic picture still upbeat
- U.S. diplomats, but not prosecutors, seek to quell India dispute |
- Target cyber breach hits 40 million payment cards at holiday peak |
- New York Mayor-elect's reputation for lateness parodied on Twitter
- Last-minute Obamacare exemption for those with canceled plans