Asian Financial Crisis

The stock market crashes 40%, property prices plunge 20%, three big economies in the region have to ask for rescue packages from the IMF and… well, maybe it isn’t the end of the world in Hong Kong. People here have lived through four stock market crashes in the last 10 years and the market has bounced back each time to reach new highs. Read the rest of this entry »

Hong Kong remains - when everyone else has devalued - in a position where it cannot sustain its currency rate against the US dollar. And as the Chinese economy is deteriorating so drastically that it’s stagnating itself, the possibilities for flows of trade and investment in and out of China, which are essential for Hong Kong, are diminished.

Its current account and external position on trade and investment therefore has moved into deficit so there are flows of money out of the foreign exchange reserves of the Hong Kong Monetary Authority as a result. Read the rest of this entry »