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FS speaks on linked exchange rate system

     Following is the transcript of remarks by the Financial Secretary, Mr John C Tsang, at a media session at the lobby of West Wing, Central Government Offices, Tamar, today (June 12):

Financial Secretary: I know that Joseph Yam has raised some points regarding the linked exchange rate. Norman Chan and some local bankers as well as some legislative councillors have also made their views known on the subject.

     I have just returned from Macau this afternoon and have quickly gone through the paper. I found that it contains nothing particularly new. The views expressed by Mr Yam have in fact been raised by different commentators over the years. They have also been thoroughly discussed and analysed by HKMA colleagues when Mr Yam was still the Chief Executive of the Monetary Authority. We all agree that the linked exchange rate is most suitable for Hong Kong and there is no need whatsoever to make any change. The system has served Hong Kong well for the past 30 years or so. It has been an effective tool and I can see no reason why it should be changed. As Financial Secretary let me reiterate in no uncertain terms that I see no need, nor do I have any intention to change the peg.

Reporter: (inaudible)

Financial Secretary: There's absolutely no need to make any change.

Reporter: So Secretary, does that mean the Hong Kong dollar will be pegged to US dollar forever?

Financial Secretary: Forever is a pretty good amount of time.

Reporter: So, it won't be forever?

Financial Secretary: It's a pretty good amount of time.

Reporter: (inaudible)

Financial Secretary: Would you want to restrict yourself to this particular issue right now? I think there is a lot of interest out there.

Reporter: What about a review? The peg has been there for almost 30 years.

Financial Secretary: We have done reviews for the last 30 years as well. We remain of the same view, that this is the best system for Hong Kong, and we have no intention to make any change.

Reporter: How often do you review the system?

Financial Secretary: For the last 30 years we have been doing so.

(Please also refer to the Chinese portion of the transcript.)

Ends/Tuesday, June 12, 2012
Issued at HKT 19:08


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