Hong Kong Monetary Authority (HKMA)’s policy of linking the city’s currency to the US dollar has received support from the International Monetary Fund (IMF), Bloomberg reports. Hong Kong’s linked exchange-rate system will remain an important pillar for the city’s economy, according to Director of IMF’s Asia Pacific department Anoop Singh. HKMA is the government authority in Hong Kong responsible for maintaining monetary and banking stability.
Since 1983, the Hong Kong dollar has been maintained at about HK$7.80 to the U.S. dollar and has been allowed to fluctuate by up to 5 Hong Kong cents around that level since 2005. Hong Kong’s consumer prices, exclusive of impact of government subsidies, climbed 6.3 percent in August, which is the highest since the global financial turmoil in 2008. This has fuelled rumours that policy makers may be forced to give up the currency linkage.
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