With the adoption of Currency Board Arrangement by Hong Kong for more than 20 years, this mechanism (the pegged exchange rate) brought about a stable economic environment to foster Hong Kong being one of the fast growing economies in the world. In view of the changing economic environment over time, the merits of the pegged exchange rate in the past now become the drawbacks for Hong Kong's economic recovery from the 1997 Asian Crises.The debates on whether or not to unpeg the exchange rate are keen on discussion among academy and politician but there is still no concrete answer being arrived.In fact, however, it seems to have consensus in Hong Kong society that the government would not unpeg the exchange rate and it then makes most of the enterprises lack of sense in managing exchange rate crisis. The standpoint of this article is to examine and analyse Hong Kong's existing internal and external economic factors which having impacts on the maintenance of pegged exchange rate. Besides, some previous failure experiences by other countries in adopting pegged exchange rate would also be used as a reference point in comparison of Hong Kong's present situation in finally reaching a conclusion that the pegged exchange rate of Hong Kong would need to be unpegged. The other issue of this article focuses on advising Hong Kong's enterprises how to manage the possible economic crisis out of the unpeg. A series of crisis management strategies and measures is provided in this article as a guideline for enterprises reference.In short, the purpose of this article is trying to raise concern for enterprises with business in Hong Kong to better manage the possible economic crisis derived from the pegged rate changing to unpegged.
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