THE former chairman of the United States Federal Reserve Board, Paul Volcker, has warned there will be no easy solutions for remedying the weak US dollar.
But Mr Volcker, who was in the territory yesterday as head of the 11-member Hong Kong/United States and United States/Hong Kong Economic Co-operation Committees, was hopeful that regional currency volatility resulting from the dollar's slide would not result in the formation of a trading bloc in Asia.
Mr Volcker, and his Hong Kong counterpart on the committees, Tung Chee-hwa, were presenting the outcome of the 10th plenary session on issues affecting Hong Kong-US trade relations.
Mr Tung, who is also chairman of Orient Overseas (International), said the weak US dollar, to which the Hong Kong dollar was pegged, would result in the territory's inflation exceeding government estimates of between eight and 8.5 per cent.
This was because of the higher cost of imports from major trading nations such as China and Japan.
The committees meet annually with the aim of finding ways of strengthening economic and trading ties between Hong Kong and the US.
Their joint communique called for the renewal of China's unconditional Most Favoured Nation status to be extended annually 'without renewed threat of interruption in future years'.
