Hong Kong's current monetary policy mechanism pegging its currency to the US dollar is the best system for the territory, the head of the central bank said on Wednesday. In response to questions, Norman Chan, chief of the Hong Kong Monetary Authority, the city's de-facto central bank, said he has no plan or intention to change the peg, which has been in place since 1983.
The Hong Kong dollar has stayed at the strong end of its trading band for the past few days as capital flowed in to the Asian financial centre from investors looking for havens from recent global market volatility. The local currency is pegged at 7.8 to the US dollar since 1983, but can trade between 7.75 and 7.85. Questions about the peg's durability resurfaced last month after China's surprise devluation of the yuan briefly sent financial markets into a tailspin.