Tuesday, 25 June 2024

Hong Kong Monetary Authority — Best Macroeconomic Regulator in Asia Pacific

5 min read

By The Asian Banker

Through its strategic monetary policies and regulatory frameworks, the Hong Kong Monetary Authority (HKMA) has balanced economic growth, employment and price stability. In 2023, Hong Kong’s economy grew 3.2% after experiencing a contraction of 3.7% the previous year. The economic recovery derived from inbound tourism and private consumption, however, still faced challenges amid weak export demand and rising interest rates.

Hong Kong’s underlying consumer price inflation remained moderate in overall terms in 2023. Netting out the effects of all the government’s one-off relief measures, the underlying composite consumer price index inflation stayed at 1.7% in 2023, the same as in 2022.

Under the Linked Exchange Rate System, the HKMA buys Hong Kong dollars and sells US dollars when the weak-side Convertibility Undertaking, or CU, is triggered, aiming to keep the HKD-USD exchange rate within the CU range. After rounds of interventions by the HKMA, the CUs have not been triggered since May 2023, and the aggregate balance of the banking system remained little changed, closing at $5.7 billion at the end of February 2024. Overall, the local currency exchange and money markets continued to operate smoothly.

For its adept management of inflation rates, promotion of robust economic growth, and maintenance of financial stability amid global economic uncertainties, the award for Best Macroeconomic Regulator in Asia Pacific goes to Hong Kong Monetary Authority.

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