Hong Kong remains committed to retaining its link to the U.S. dollar through a currency board and has strong support from mainland China in defending its dollar, its top administrative officer said Thursday in Tokyo.
Anson Chan, chief secretary for Administration of the Hong Kong Special Administrative Region government, told a news conference that she has great confidence in the system binding the two currencies. "Because we regard exchange rate stability as the cornerstone of Hong Kong's monetary and financial stability, we will not depart from the link," she said.
She acknowledged that the former British colony is feeling the effects of the Asian economic crisis, noting that Hong Kong's economic growth in the first three months of the year fell 2 percent. However, the ensuing adjustments in the local economy in such areas as wages and property prices are painful but necessary to maintain international competitiveness in the long term, she said. "We are very conscious of the need to continue to maintain international confidence by demonstrating that we will not interfere unduly in the operation of market forces," she said, adding the economic fundamentals of the Special Administrative Region remain strong.