The Hong Kong Monetary Authority (HKMA) has reiterated its dedication to the Linked Exchange Rate System, ensuring the Hong Kong dollar remains pegged to the US dollar at a rate of around 7.80. This commitment is supported by the robust Exchange Fund, which the HKMA believes is adequate to maintain monetary and financial stability.
According to the HKMA, the system has proven resilient through various economic cycles and external shocks. The Exchange Fund, which backs the Hong Kong dollar, provides a strong buffer against potential market volatility.
The HKMA has stated it will continue to closely monitor market developments and stands ready to take appropriate measures to ensure the smooth operation of the Linked Exchange Rate System. They emphasized that the peg remains the most suitable arrangement for Hong Kong’s economy.
Key aspects of the Linked Exchange Rate System include:
- The HKMA’s commitment to maintaining the exchange rate within a narrow band.
- The Exchange Fund’s role in backing the Hong Kong dollar.
- Active monitoring of market conditions.
The HKMA’s reaffirmation aims to reassure investors and the public of the stability of Hong Kong’s monetary system amidst global economic uncertainties.
