The Hong Kong Monetary Authority chief has attempted to ease market concerns over the government's ability to defend the US dollar peg by pointing to the SAR's strong external assets. Joseph Yam Chi-kwong said in his weekly column on the authority's Web site that Hong Kong's external financial position was the main factor determining the strength of its currency. Given that the government, as well as banks and individuals, had more foreign-currency assets than liabilities, he said Hong Kong was in a good position to protect its currency. According to the Census and Statistics Department, Hong Kong's net external financial assets stood at US$272 billion, or 166 per cent of gross domestic product, last year. 'This is huge. It is the highest in the world. To put the number in context: the corresponding figure for Japan, the second-highest among those compiling similar figures, is 35 per cent [of GDP],' Mr Yam said. 'This very healthy external financial position of Hong Kong should not be overlooked when taking a view about the inherent strength or weakness of the Hong Kong dollar.' Mr Yam's remarks were aimed at dampening speculation on any change on the US dollar peg. Since Argentina abandoned its peg link, attention has focused on whether Hong Kong would abandon its dollar peg as it is one of only a few advanced markets still using such a system. But Mr Yam said: 'I really do not see anything in common between Argentina and Hong Kong. There is no other place on this globe that is farther away from Hong Kong . . . That is how remote Argentina is geographically, and it is equally remote in terms of its present monetary and economic position.' He said Hong Kong's strong external financial position allowed the SAR to keep its peg. 'Unlike the handful of emerging markets that have recently had problems on the currency front, the Hong Kong SAR government has no external debt,' he said. Foreign reserves held by the Exchange Fund total more than US$110 billion - the fifth-largest in the world and second-largest in per-capita terms. 'Hong Kong is also running a balance of payments current-account surplus, which means that we are earning more foreign exchange from the goods and services we export than we pay for the goods and services that we import,' he said.