Financial Secretary John Tsang welcomes the International Monetary Fund’s Staff Report on Hong Kong, which strongly endorses the linked exchange rate system and commends the Government’s effort to safeguard financial stability.
The IMF Mission visited Hong Kong from October 17 to 27 and released its report today. It reiterated its long-standing support for the linked exchange rate system, which it sees as simple, credible, transparent and widely understood, and that generates substantial benefits in terms of monetary and financial stability.
Financial Secretary John Tsang said there is no intention to change the system which has served Hong Kong well particularly during very volatile times.
“While Hong Kong has recovered reasonably well from the global financial tsunami, we are facing increasing downside risks to the global economy. We will remain vigilant and take all necessary measures to meet with the challenges ahead,” Mr Tsang said.
The report sees the quick rebound of Hong Kong economy from the global financial crisis propelled by a solid domestic economy and deepening linkages with the Mainland.
With a weakening in external demand, the IMF Mission forecasts Hong Kong’s economic growth to ease to 5.75% in 2011 and slow to 4% in 2012. Consumer price inflation is projected to average 5.5% in 2011 and remain in the 4% to 5% range throughout 2012.
It notes the regulatory authorities have been forward-looking and proactive in protecting the financial system from an eventual turn in the credit cycle; that the Government’s property-market measures have helped lower transaction volumes, restrain credit to housing, and protect the financial system; and that Hong Kong has become the premier offshore Renminbi centre.
Hong Kong Monetary Authority Chief Executive Norman Chan also welcomed the report’s commendation of the countercyclical supervisory measures to strengthen the banking system’s resilience.
“We are acutely aware of the highly volatile market conditions worldwide and are prepared to introduce appropriate and timely measures to maintain monetary and banking stability in Hong Kong,” Mr Chan said.
“We also welcome the IMF Mission's recognition of the encouraging developments of offshore renminbi business in Hong Kong. We will continue to enhance and promote Hong Kong as the preferred one-stop renminbi business platform in the offshore market.”
Click
here to see the report.
