The Hong Kong government’s support for the city’s currency peg is unlikely to wane even as tightening monetary policy hits property prices, according to the architect of the exchange-rate system.
“We have very strong asset markets, and that makes it much more difficult for lower-income people to acquire property,” John Greenwood, chief economist at Invesco Asset Management in London, said in a Sept. 23 phone interview. "If there’s a 10 to 15 percent correction in the asset market because of a strong U.S. dollar or rising interest rates, I think on the whole the government would welcome that."
