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Calls grow to review Hong Kong dollar peg as officials draft plan

A Hong Kong financial industry group said the US dollar peg can limit local monetary control, pointing to stress on homebuyers and small businesses during US rate-hike cycles.

Reported · Written up by our desk · Central Banks

Hong Kong’s longstanding peg of the Hong Kong dollar to the US dollar is facing fresh calls for review, after a local financial industry body urged wider use of the yuan and raised the possibility of moving toward a currency and gold basket, according to SCMP Economy.

The proposal was submitted this week by the Hong Kong Securities and Futures Professionals Association, as the government prepares public feedback for its first-ever five-year plan.

The group argued the peg effectively cedes control of local monetary policy to the US Federal Reserve, saying that during recent US rate-hike cycles the arrangement added financial pressure on local homebuyers and small businesses.

Analysts cited by SCMP Economy said the current peg system is likely to remain in place despite the new review push.

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