By Agencies
In a recent interview, Hong Kong’s leader confirmed that the city will continue to maintain its currency peg to the U.S. dollar, despite rising geopolitical tensions and some calls to switch to a peg with the Chinese yuan.
The Hong Kong dollar has seen significant fluctuations in the past two months, strengthening to the upper end of its trading band before softening near the lower limit in recent trading sessions.
John Lee, the city’s chief executive, emphasized that the link to the U.S. dollar has been a key factor in Hong Kong’s financial success, stating that the peg often faces pressure during uncertain times.
To uphold the currency peg within the range of 7.75 to 7.85 per U.S. dollar, the Hong Kong Monetary Authority injected HK$129.4 billion into the market, purchasing $16.7 billion worth of U.S. dollars through multiple interventions last month.
Amid ongoing trade tensions between the U.S. and China, some market analysts have suggested shifting from the U.S. dollar peg to the yuan.
However, Lee reiterated his administration’s commitment to strengthening Hong Kong’s status as a global offshore yuan hub while defending the U.S. dollar peg.
“We will increase our offshore yuan product offerings to boost trade,” he noted, highlighting that approximately 80% of offshore yuan payments are processed in Hong Kong.
