Strong Hong Kong dollar weighing on tourist spending, finance chief Paul Chan says
- Finance minister Paul Chan says possibility of higher-for-longer interest rate regime in US may hurt city’s exports, inbound investment and capital markets
- Businesses should develop new products and embrace digital innovation to adapt to changing consumer habits, he says
A strong Hong Kong dollar is weighing on spending by tourists, the finance minister has said, urging businesses to develop new offers and innovate as customers’ tastes change.
The knock-on effect could hamper the city’s economic recovery despite recent positive signs, he said.
“But the external environment remains complicated and there are a lot of uncertainties,” Chan said in his weekly blog. “The US Federal Reserve last week held interest rates steady. Coupled with stubborn inflation, the market expectation for a rate cut has weakened compared with earlier this year.”
He said the conditions could “bring adverse impacts to global economic recovery, Hong Kong’s exports, as well as the sentiment of local investment and capital markets”.
The Fed announced last week it was holding its benchmark lending rate steady in the 5.25 per cent to 5.5 per cent range as core inflation remained above the target of 2 per cent.