ZCZC
BCN-28
HONGKONG-ECONOMY-HKMA-CHAN
Hong Kong’s monetary chief to step down after decade in post
HONG KONG, Feb 22, 2019 (BSS/AFP) – The head of the Hong Kong’s de-facto
central bank, Norman Chan, will step down this year after a decade in the
post that saw him oversee the city’s recovery from the global financial
crisis as well as a ballooning property market.
Local reports cited sources as saying the government would likely to
promote one of his three deputies to take over at the helm of the Hong Kong
Monetary Authority when Chan retires in October.
His successor will come in facing a number of challenges including the
impact of China’s stuttering economy and how to address a housing crisis
caused by a stratospheric rise in property prices.
However, they can expect a healthy remuneration, with Chan earning HK$10.8
million ($1.4 million) in 2017 making him one of the world’s best paid
central bankers.
With HKMA monetary policy linked to that of the Federal Reserve owing to
their currency peg, record low interest rates in the US during the recovery
fanned a surge in costs to make Hong Kong the world’s most expensive housing
market.
While Chan has introduced a number measures to keep it from rising
further, but mostly to no avail.
During his tenure the HKMA has also been forced to step in to the currency
markets to maintain the local dollar’s decades-old peg to the greenback.
Among the biggest interventions was in July and August 2014 when it
stepped in 24 times, injecting a total of US$9.7 billion into the financial
system as the local dollar surged against the US unit owing to a flood of
cash seeking access to China’s booming market.
The latest was last year, when the Hong Kong dollar weakened to the bottom
end of its 7.75-7.85 trading band, prompting HKMA to buy billions of US
dollars worth of the local currency.
The 2018 interventions led to hike commercial borrowing costs for the
first time in 12 years.
Chan has also had to defend the link, with critics including former HKMA
boss Joseph Yam previously calling for a review saying it left the city at
the mercy of the Fed.
BSS/AFP/HR/1400