Why Hong Kong Won't Dump the Dollar

The Hong Kong currency's fixed peg to the greenback has contributed to the city's financial stability. Also, a renminbi peg isn't feasible yet

Is a speculative attack on the Hong Kong dollar looming? That's one of the more interesting questions in global finance right now, given the recent disclosure by Hong Kong's former financial secretary Antony Leung that back in 2002 the government seriously contemplated abolishing its currency peg to the U.S. dollar. On top of that, both Kuwait and Syria in recent weeks have dropped their currency pegs, thanks in large part to the weaker outlook for the U.S. dollar and economy at a time of big account and budget deficits.

To continue reading this article you must be a Bloomberg Professional Service Subscriber.