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The evolution of the Hong Kong currency board during global exchange rate instability, 1967–19731

Published online by Cambridge University Press:  16 September 2009

Catherine R. Schenk
Catherine R. Schenk
Affiliation:
University of Glasgowc.schenk@lbss.gla.ac.uk
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Abstract

Hong Kong SAR is well known as one of the few economies to operate a form of currency board as the basis of its monetary system. This system arose out of colonial status and has been retained except for a period of floating from 1975-83 to the present day, with some amendments. This article explores the evolution of the Exchange Fund during a period of global exchange rate instability showing that the abandonment of the monetary anchor in 1975 was part of a series of innovations to the use of the Fund as the colonial government sought to manage the exchange rate risks posed by the collapse of the Bretton Woods system.

Résumés

Hong Kong SAR est bien connue comme une des rares économies à utiliser une forme de conseil des devises comme base de son système monétaire. Ce système est issu de son statut colonial et a été conservé excepté pour une période de flottement allant de 1975–1983 à aujourd'hui, avec des amendements. Cette communication explore l'évolution du Fonds d'échange pendant une période d'instabilité du taux de change global, et montre que l'abandon de l'ancre monétaire en 1975 faisait partie d'une série d'innovations dans l'utilisation du Fonds alors que le gouvernement colonial cherchait à gérer les risque du taux de change posés par l'effondrement du système de Bretton Woods.

Abstrakte

Die Sonderverwaltungszone Hong Kong ist gut bekannt dafür, zu den wenigen Weltwirtschaften zu gehören, deren Währungssystem eine Art von Currency Board (Währungsamt) zur Grundlage hat. Dieses System liegt in seinem ehemaligen Kolonialstatus begründet und wurde – mit Ausnahme eines Freigabezeitraums (Floating) von 1975–1983 – mit einigen Änderungen bis zum heutigen Tag beibehalten. Diese Studie erkundet die Herausbildung des Devisenfonds in einem Zeitraum der Instabilität des globalen Währungskurses und zeigt, dass die Aufgabe der Ankerwährung im Jahre 1975 Bestandteil einer Reihe von Neuerungen war, die zum Ziel hatten, den Fonds auf neue Weise einzusetzen, und zwar zu einem Zeitpunkt, als die Kolonialregierung versuchte, die Wechselkursrisiken, die durch den Zusammenbruch des Bretton Woods Systems entstanden waren, zu bewältigen.

Resúmenes

La Región Administrativa Especial de Hong Kong (HKSAR) se conoce bien como una de las pocas economías que operan un tipo de comité cambiario (‘currency board’) como base de su sistema monetario. Este sistema surgió del estado colonial y se ha mantenido salvo en un período de flotación del mercado de valores de 1975 a 1983 hasta nuestros días, con algunas correcciones. Este artículo explora la evolución del fondo de cambio durante un período de inestabilidad de tipo de cambio global mostrando que el abandono del ancla monetaria en 1975 fue parte de una serie de innovaciones con respecto al uso del fondo mientras el gobierno colonial buscaba gestionar los riesgos de tipo de cambio planteados por el fracaso del sistema de Bretton Woods.

Type
Articles
Information
Financial History Review , Volume 16 , Issue 2 , October 2009 , pp. 129 - 156
Copyright
Copyright © European Association for Banking and Financial History e.V. 2009

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References

2 Kurt Schuler and Steve Hanke were the most vociferous advocates. K. Schuler, Should Developing Countries Have Central Banks? Currency Quality and Monetary Systems in 155 Countries, Institute of Economic Affairs, 1996. Hanke, S., ‘Reflections on exchange rate regimes’, Cato Journal, 19 (1999)Google Scholar.

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82 Ibid.

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