The Bank of China supports the SAR Government in its move to squeeze speculators out of the Hong Kong market, officials said yesterday.
After the launch of BOC International Holdings, BOC chairman and president Wang Xuebing said government intervention in the market to help revive its stability would have a positive effect on the economy in the longer term.
'If the Hong Kong financial market cannot operate normally and cannot maintain its stability, the risk will be far too much for the SAR to take,' he said.
Asked if the SAR had spent too much on intervention, Mr Wang said he believed the government would always give cautious consideration to its financial strength before taking action.
He did not think the use of tens of billions of foreign reserves on the intervention would undermine the SAR's ability to defend the peg, saying Hong Kong still had a sound economic framework with strong monitoring systems and foreign reserves.
Mr Wang said it was up to the SAR to decide on the need for further intervention, adding he was confident the Government had a comprehensive plan to tackle the problem.
