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Hong Kong Monetary Authority (HKMA)

Peg can go, says Yam

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What?

Joseph Yam Chi-kwong, a professor at Chinese University, has suggested that Hong Kong should move away from the dollar peg. He released a research paper on Tuesday making the suggestion.

The government was quick to oppose it. 'The peg won't change and won't have to change,' said chief executive-elect, Leung Chun-ying.

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Who?

Twenty-nine years ago, Yam helped to create the Hong Kong-US dollar peg. As the head of the Hong Kong Monetary Authority, he successfully defended the peg during the Asian financial crisis of 1997.

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While there's no doubt the peg has been able to keep Hong Kong's economy stable, Yam says it has its drawbacks. 'It is not possible for adjustments to economic shocks of all descriptions to work through the exchange rate,' he says.

Why?

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