Author(s)

Wei Chen

Corresponding Author

Wei Chen

ABSTRACT

The Hong Kong linked exchange rate system was introduced in 1983 and has been in place for almost 40 years. During these almost 40 years, the system has brought many benefits to the region and helped Hong Kong's financial markets to remain stable during several crises. However, with nowadays changes in the economic environment, national policies, the global economy, as well as the gradual rise in the cost of adopting the linked exchange rate system, many voices have emerged against the continued use of this system. However, after considering the perspectives of government credibility, elastic and alternate choices for the current linked exchange rate system. The paper ended with the conclusion that the linked exchange rate system in Hong Kong should be maintained.

KEYWORDS

the linked exchange rate system, the Hong Kong dollar, the US dollar