Hong Kong to maintain US dollar peg despite geopolitical tensions
[SHANGHAI] Hong Kong will maintain its currency peg to the US dollar, the financial hub's leader said in an interview published on Monday (Jun 9), despite escalating geopolitical tensions and some calls to shift to a Chinese yuan peg.
The Hong Kong dollar has experienced sharp volatility over the past two months, strengthening to hit the strong end of the trading band and prompting the city's de-facto central bank to forcefully step up intervention, before the currency softened to near the weaker limit in recent sessions.
'Hong Kong's link with the US dollar has proven to be one of the fundamental success factors,' John Lee told the South China Morning Post, noting that the peg had always come under pressure, especially in uncertain times.
In order to defend the currency's peg to move within the 7.75 and 7.85 per US dollar range, the Hong Kong Monetary Authority injected HK$129.4 billion (S$21.2 billion) into the market to purchase US$16.7 billion worth of US dollars in multiple interventions last month.
Some market watchers have called for switching Hong Kong's US dollar peg to the yuan at a time when trade tensions between the world's two largest economies have created uncertainty.
Lee said his administration would strengthen the city's role as the global offshore yuan hub, while continuing to defend the US dollar peg.
'We will do more (offshore yuan) product diversification, so that it will generate more trade,' he told the newspaper, noting that about 80 per cent of the offshore yuan payments were processed in Hong Kong. REUTERS
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Straits Times
36 minutes ago
- Straits Times
Romanian president could nominate a prime minister this week
Romania's President Nicusor Dan attends a press conference, on the day of the NATO Bucharest Nine (B9) meeting, in Vilnius, Lithuania, June 2, 2025. REUTERS/Ints Kalnins/ File Photo BUCHAREST - Romanian President Nicusor Dan said on Tuesday he could nominate a prime minister this week provided pro-European parties reach an agreement on measures needed to lower the European Union's highest budget deficit and prevent a ratings downgrade. Centrist Dan, who won a divisive presidential vote in May that saw the far right gain ground, must form a ruling majority that has until the end of June to approve deficit cutting measures to avoid a downgrade to below investment grade. The European Commission, ratings agencies and analysts have said Romania cannot reduce its shortfall over seven years to the EU's 3% threshold as agreed without hiking taxes, but Dan and the four pro-European parties have proved reluctant to enforce unpopular measures, focusing instead on cuts to state spending. "There is a hierarchy of priorities, first cutting useless state spending, then merging some institutions, rescheduling some investments to 2026 and lastly possible tax hikes," Dan said during a visit to neighbouring Moldova. "I hope we will reach to the tax side as least as possible." Dan said the parties had identified a list of 60-80 possible measures, but had yet to agree on any. The president, who has a semi-executive role, added that pending the talks he could nominate a PM this week. Two sources told Reuters ratings agencies had told a London panel in May they were ready to downgrade Romania from the last rung of investment grade unless they saw convincing measures including tax hikes. The next rating review is in August. Earlier this month the European Commission opened the possibility of freezing some EU funds for Romania next year. 'SOLID PLAN' NEEDED Brussels, ratings agencies and the IMF have said hikes to value added tax or changes to Romania's flat 10% tax on income would be the most effective. "It needs to be a solid plan, two big measures that everyone can price are better than 50 that nobody can evaluate," one of the London sources said. "How can anyone trust you that you'll do what's needed in the 7-year adjustment plan?" Claudiu Nasui, a lawmaker from the centre-right Save Romania Union, one of four pro-EU parties engaged in talks, is a strong proponent of state spending cuts inspired by Argentinian President Javier Milei. He told Reuters that he had identified 34 billion lei ($7.73 billion) worth of cuts that could be made in the second half of the year without cutting healthcare, education and defence. However, they included cutting state-funded investment schemes that were easier to tap than EU funds with little oversight, a political instrument for mayors that parties were unlikely to approve cutting. "Any measure to cut the deficit will make parties unpopular, spending cuts or tax hikes, you just need political will," Nasui said. "I often look at a street trash bin outside my office, there are always people rummaging in it. Hiking taxes will not hit us, but it will hit those poor people." REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Straits Times
an hour ago
- Straits Times
US agencies tracked foreigners visiting Musk's properties in 2022 and 2023, WSJ reports
FILE PHOTO: U.S. President Donald Trump and Elon Musk attend a press conference in the Oval Office of the White House in Washington, D.C., U.S., May 30, 2025. REUTERS/Nathan Howard/File Photo WASHINGTON - U.S. government agencies tracked foreign nationals' visits to Elon Musk's proprieties amid concerns over possible attempts to influence the tech billionaire, The Wall Street Journal reported on Tuesday, citing people familiar with the matter. The investigation, which tracked the foreigners in 2022 and 2023, included the Department of Homeland Security and the Justice Department, according to the report. It focused on people visiting the Musk from countries in Eastern Europe and elsewhere, the Journal said. Musk, who runs five companies and has sensitive government contracts, has had unprecedented access to top government officials from countries around the world. The U.S. investigation focused on possible attempts to influence Musk, the Tesla chief executive, the newspaper said. No charges were filed and the status of the probe was not clear, according to the Journal. The world's richest person, Musk was tapped by President Donald Trump to lead what became a chaotic drive to slash the federal government. He was a top adviser to Trump until the two men had a public rupture last week. Officials at several agencies including the FBI have been briefed on the investigation, which predated the Trump administration, the newspaper reported. The Journal said Musk did not respond to requests for comment and the FBI declined to Comment. The Trump administration has expressed concern about possible foreign influence in the United States. REUTERS Join ST's Telegram channel and get the latest breaking news delivered to you.
Business Times
an hour ago
- Business Times
US: Wall St muted at open as US-China trade talks in focus
[NEW YORK] Wall Street's main indexes opened subdued on Tuesday (Jun 10) as investors awaited the outcome of ongoing trade talks between the United States and China aimed at cooling a tariff dispute that has bruised global markets this year. The Dow Jones Industrial Average fell 23.5 points, or 0.05 per cent, at the open to 42,738.27. The S&P 500 rose 4.0 points, or 0.07 per cent, at the open to 6,009.91, while the Nasdaq Composite rose 28.9 points, or 0.15 per cent, to 19,620.108 at the opening bell. REUTERS
