Eddie Yue Wai-man, the new chief executive of the Hong Kong Monetary Authority, made some huge commitments as he took over the top position in the city-state's de facto central bank. The new chief mentioned during a press conference that he was committed to defending the city's peg linked system and he vowed to restore Hong Kong's status as the go-to financial destination in Asia.
Yue mentioned that he does have some very tough challenges ahead of him given the current geopolitical and domestic climate. The executive was, of course, referring to the overall global economic slowdown, Brexit, and the country's ongoing trade dispute with the United States.
The various economic and geopolitical factors have driven Hong Kong's various sectors into a technical recession. Yue hopes to remedy this problem with a renewed focus on industries that will help drive economic growth.
Yue specifically mentioned a renewed focus on financial technology, an industry that could help Hong Kong strengthen its role as the go-to international financial center in Asia. Yue hopes that international investors would still use Hong Kong as the gateway to enter the Chinese markets through its bond and stock connect schemes.
The new HKMA chief also reiterated that he has no plans of making any changes to the city's peg linked system given that it has already proven itself to be very effective and that it was already a well-established system.
Hong Kong's peg linked system was originally established in 1983. The system linked the local currency to a 7.8 to 1 ratio to the US dollar. One of the HKMA's job is to intervene in the foreign exchange markets when need to ensure that the Hong Kong currency trades within the 7.75 to 7.85 range.
To support the system, Yue stated that he and his team will be doing everything they can to maintain currency stability by closely monitoring market developments. According to Yue, Hong Kong is strong enough to withstand heavy financial blows and the HKMA's financial war chest is sufficient enough to take on short seller's attack.
The 54-year old finance veteran has been working for the HKMA since it was established in 1993 after the merger of the city's Office of the Exchange Fund and the Office of the Commissioner of Banking. Yue is the third chief executive of the HKMA and was preceded by Norman Chan Tak-lam, who was the bank's chief since 2009. Yue officially started his term on October 1.
