THE Government yesterday reiterated its commitment to non-intervention, even as it came under fire at home and abroad for its market-fixing activities. At the same time a clear consensus emerged among international investors that the peg's days are numbered. Chief Secretary Anson Chan Fang On-sang, returning from a two-day visit to Singapore, defended the Government's policy, saying: 'We absolutely don't want to intervene in anyone short selling the index futures but we cannot tolerate somebody creating confusion in the foreign exchange market, damaging our economic system, the interests of our businessmen and the public.' She said Government's use of the Exchange Fund to buy stocks and futures on Friday was a very 'special step' to attack speculators. Democratic Party chairman Martin Lee Chu-ming said the unprecedented intervention had damaged Hong Kong's free market reputation. 'Rather than being a regulator, the Government is now a player, in fact a key player. People don't know when it will do it again.' Market observers chimed in with criticism. 'Hong Kong investors will be frightened of touching the markets, and international investors won't touch us with a barge pole. Hong Kong's a laughing stock,' one source said. If the Government's actions were intended to kill off speculation and shore up confidence in the peg, they appear to have fallen flat. Liberal Party member Lui Chee-wah said the economic downturn was the fundamental cause of the plunge of the stock market and costly intervention would not solve this problem. He said the Government's abrupt departure from its non-interventionist policy cast further doubts on its resolve to keep the dollar peg and might attract more speculation on the local currency. That view was backed by a number of international market players, with a consensus that the peg's days were numbered and it was now a matter of when not if. In Singapore the clear majority of those quizzed by Sunday Money gave the 15-year-old peg a probable maximum remaining life-expectancy of six to 12 months. A similar average life-span is predicted for the yuan, though its fate is seen as more dependent on the beleaguered Japanese yen. 'They are both definitely going to go. Though I'd be very happy if I'm proved wrong,' said one banker in Singapore. 'I'm not sure of the commitment of the Hong Kong Monetary Authority.' Market intelligence outfit Independent Economic Analysis (Idea) is predicting Hong Kong's 15-year-old peg will go in the first half of next year. Idea currency analyst Jacquiline Ong said: 'By that time Hong Kong will have taken just about as much pain as it can stomach.' Catherine Tan, currency analyst at Technical Data, said: 'If the region's economies start to stabilise next year that would be the time to think about what they are going to do.' In London, the received wisdom is that the Hong Kong dollar and the yuan will eventually break, and meet at some point in the middle. 'I don't think anyone is shorting the Hong Kong dollar in the expectation that the Hong Kong dollar will break [now],' said Paul McNamara, emerging markets strategist at Julius Baer International. In fact most currency analysts note that as most of the hedge funds involved in pressuring the Hong Kong dollar were from the US, a break of the peg would be undesirable. On Friday, the key six-month Hong Kong dollar forward closed at 2,125 points - effectively pricing the Hong Kong dollar in six months at 7.962 - well below the official pegged rate of 7.8, and yet not low enough to signify a real intent to break the peg. Significantly, the 12-month forward gives a more damning assessment of where the market expects Hong Kong to be in a year. It closed at 4,450 points - putting the Hong Kong dollar at 8.1945.