Genberg, Hans and He, Dong and Leung, Frank (2007): RECENT PERFORMANCE OF THE HONG KONG DOLLAR LINKED EXCHANGE RATE SYSTEM.
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This paper reviews the performance of the Hong Kong dollar Linked Exchange Rate system since the introduction of the three refinements to it in May 2005. It presents an analytical framework which argues that, in a fully credible exchange rate target zone regime, the spot exchange rate normally stays inside the band but does not have a natural tendency to converge towards the centre of the zone. While a certain level of interest rate differential between the Hong Kong dollar and the US dollar may persist, it should not grow significantly larger than what is implied by the width of the Convertibility Zone. Judged against this framework, the developments since May 2005 point to increased credibility of the refined Linked Exchange Rate system.
|Item Type:||MPRA Paper|
|Original Title:||RECENT PERFORMANCE OF THE HONG KONG DOLLAR LINKED EXCHANGE RATE SYSTEM|
|Keywords:||Hong Kong dollar linked exchange rate system|
|Subjects:||E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies
F - International Economics > F3 - International Finance > F31 - Foreign Exchange
|Depositing User:||Dong He|
|Date Deposited:||05. Jul 2008 05:01|
|Last Modified:||13. Feb 2013 07:26|
Genberg, Hans, Li-gang Liu and Xiangrong Jin,“Hong Kong’s Economic Integration and Business Cycle Synchronisation with Mainland China and the US”, HKMA Research Memorandum 11/2006; “
Leung, Frank, "Structural Determinants of Hong Kong’s Current Account Surplus”, HKMA Research Memorandum 14/2006
Liu, Li-gang, and Kelvin Fan, "Hong Kong’s Trade Patterns and Trade Elasticities”, HKMA Research Memorandum 18/2006.