Foreign Exchange Market


PUBLISHED : Tuesday, 26 June, 2012, 12:00am
UPDATED : Tuesday, 26 June, 2012, 12:00am


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Not won over by Yam's arguments

Joseph Yam Chi-kwong is an honest person.

I once praised him, through these columns, for his 'honesty in admitting being slow in problem recognition'. With his recent exposition on the future of Hong Kong's monetary system, I observe further instances of his candour.

It took him almost three years after retirement from the top post in the Monetary Authority and nearly 30 years since the institution of the city's fixed exchange rate system which he helped implement, to begin thinking about alternatives to the arbitrary linkage between our currency and the US dollar, the currency of a socially different and politically unconnected economy.

We pay economic and socio-political costs for the stability of the fixed exchange rate system. Since its inception, the relevant question about the peg has been when and how it can be abolished, and not whether. We would have thought that quantitative analysts and financial gurus in the Monetary Authority regularly run simulations for risk-return assessment and scenario analyses for re- and un-pegging. But this apparently was not the case when Mr Yam headed the authority.

Now he recognises that 'the structure of Hong Kong's public finances lacks a theoretically sound foundation' and tries to share his experiences of a long career in monetary affairs for public discussion.

His prolix discourse, characterised by a surfeit of trivialities, contains little useful insight. He dwells on ancillary issues about the peg rather than attacking the core problems of ways to make better use of the peg and better preparations for its eventual removal.

Although 'not qualified to express a legal opinion', he belabours legalistic arguments about whether price stability can replace exchange rate stability as our monetary policy objective under existing law. For political consideration, he argues whether a currency is 'bigger' if one unit of its currency can exchange more than one unit of another currency; an irrelevant issue as he admits.

Mr Yam is a disciplined disciple of the fixed exchange rate regime. His focus on procedural and inconsequential matters probably reflects what preoccupied his time while under the Monetary Authority's employ.

Pierce Lam, Central

We all need to be more tolerant

I read with interest Alex Lo's column ('Anti-Chinese law served the Chinese well', June 22).

Racism particularly institutionalised and legally sanctioned is a terrible and evil thing. However I would point out that the Chinese residents of those 'white man's countries' like the US and Australia are now positively regarded by the majority of their fellow citizens and live free of the evils which pervaded these countries in the 19th century.

However the descendants of those Chinese immigrants who settled in places like the-then Dutch East Indies, it could be argued, appear to have fared differently, as events in May 1998 tend to illustrate.

The recent past contains numerous examples of barbarous behaviour meted out to individuals and groups because, for example, their appearance, culture and religion are different from others in the society in which they live, in China no less than anywhere else.

Including Hong Kong citizens, we all need to be more tolerant of each other's differences and smug finger-pointing under the guise of illustrating history does not help this process.

Paul Mounsey, Mid-Levels

Crackdown on touts is feasible

I am afraid your correspondent W. A. Carr from Finland is raising an old chestnut when he complains about the aggressive nature of the touts on our streets ('Aggressive touts should be banned', June 18).

Your columns have published countless letters over the years in similar vein.

Many of us, in particular those that have lived in Tsim Sha Tsui for many years, have written so many times we have given it up as hopeless. The authorities just do not realise that, in allowing this detestable practice to continue, they are ruining the otherwise favourable impression that many of our visitors have gained. And I have noticed that this menace is escalating significantly as some of these longer- serving touts are now addressing our mainland visitors in Putonghua. Your correspondent opines that the companies using these people be heavily fined.

I am afraid he is barking up the wrong tree, for their employers are no doubt honourable members of one of our local triad societies.

What is the solution? On the face of it, it is not an insurmountable problem. The concerned departments can mount a concerted operation. Personnel, expats and locals, with the appearance of tourists stroll along the popular areas; mainly southern stretches of Nathan Road.

When approached they would be taken to where these illicit goods turn up, the touts would be arrested and taken to court in due course. But somehow I think that, for what reason I do not know, such drastic action could never get off the ground.

John Wilson, Yau Ma Tei

School bus fare hike is unacceptable

I understand from a Chinese-language website that pupils may face fare rises of nearly 10 per cent on school buses.

If this is the case, I would consider it to be unacceptable as it would add a heavy financial burden for parents.

In addition to having to meet fare rises on public transport providers, parents are already under a great deal of financial pressure.

The reason for the fare rise is related to the falling number of school buses. It is more profitable for companies to operate tour coaches than have a school bus contract.

I think there are two options which could be considered by officials. The Education Bureau could include fares in its student travel subsidies schemes, so the financial burden would be lessened. Secondly, the Transport Department could amend licences so drivers could have a school and tour bus licence which would enable them to increase their level of revenue.

Daniel Hui Yin-hang, Sha Tin

Students can take the initiative

Some people have commented that Hong Kong pupils know little about world affairs.

I think that is a fair point and many young people seldom express views on international issues and rarely discuss them amongst themselves. Clearly in schools there is still a lot of ignorance on these matters.

I think the main reason for this is that pupils find it difficult to digest this kind of information. However, it is important for all of us to understand what is going on in the world and to also have good historical knowledge.

However, I do not think it is up to school authorities to take the initiative.

The information is out there and it is up to students themselves to find out what is happening in the world.

They can do this by reading newspapers and doing additional research online on their computers.

There is little more that teachers can do as they already face a heavy workload and barely have enough time to prepare well for lessons as it is.

Students can also take advantage of the liberal studies course now offered in our secondary schools to develop their critical thinking skills and learn how to analyse material and form their own opinions on international issues.

Li Suet-man, Sheung Shui

Stanley does not need more cars

The Transport Department is proposing to build a new permanent car park in Stanley Beach Road to accommodate 140 private vehicles.

They propose reversing the traffic flow on Beach Road to make it a one-way system from south to north.

I wrote this letter on Saturday, on the day of the dragon boat races.

The roads in Stanley were completely clogged up with car horns and sirens blaring.

Stanley has a very efficient and economic public transport system which brings in thousands of very welcome visitors every weekend.

It is difficult to see how the advent of hundreds of private vehicles can improve either the traffic flow or the environmental situation in this already congested village area.

Furthermore, the proposed traffic re-arrangement does not appear to have considered how the exit from the proposed one-way egress on Beach Road will intersect with the two-way Stanley Village Road (traffic lights).

Surely the government should be encouraging the use of public transport and discouraging private vehicles.

D. Wilson, Stanley