US Dollar Peg Helping Hong Kong Economy, Says Tang
Hong Kong's Chief Secretary Henry Tang has said that the territory's Linked
Exchange Rate System has served it well since its introduction more than twenty
years ago, while US dollar weakness against many of the Asian currencies can boost
Hong Kong's competitiveness. Tang told lawmakers last week that while Hong Kong is a very externally oriented
economy which is easily affected by global factors, such as the performance
of the US economy and economic reform measures on the Mainland, the exchange-rate
regime has made the city's financial system highly stable. Tang went on predict that Hong Kong's economy is likely to have another year
of solid and balanced growth in 2007, although growth may moderate next year
compared to its brisk pace in the past three years. The Hong Kong government has revised upwards its growth forecast for 2006 to
6.5%, after third quarter figures showed a surprising 1.3% quarter-to-quarter
jump in GDP growth to 6.8%. The economic forecast for next year will be announced in the Budget Speech
on February 28. .
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