Press Statement – Linked Exchange Rate System

The HKSAR Government publishes the following statement in response to enquiries on the Linked Exchange Rate system (LERS):

Since the implementation of the LERS in 1983, the LERS has been the cornerstone of Hong Kong’s monetary stability.  It is also the anchor of our financial and economic stability.  The HKSAR Government considers that there is no need to change the LERS, and has no intention to change the LERS.

Mr John C Tsang, the Financial Secretary, said “The Link has served Hong Kong well over the years.  The Link is still the most appropriate system for Hong Kong as a small and open economy, and an international financial centre.  The HKSAR Government is fully committed to maintaining the LERS of Hong Kong.  There is no need for a change and the Government will not change it.”

Mr Norman TL Chan, the Chief Executive of the Hong Kong Monetary Authority (HKMA) said, “The HKMA has conducted detailed studies and analyses on various views on the LERS.  Our conclusion remains that the LERS is still the most appropriate system for Hong Kong.  Hong Kong has weathered well and shown its resilience in the global financial crisis in 2008.  The new uncertainties and potential shocks facing the world economy and financial system as brought by the Eurozone debt crisis underscore once again the importance of monetary and financial stability.  The HKMA considers that the Link should not be changed.”

12 June 2012