The Importance of Fiscal Prudence Under the Linked Exchange Rate System in Hong Kong SAR

5 Pages Posted: 13 Apr 2013

Date Written: October 1, 2012

Abstract

The Hong Kong SAR has consistently pursued a prudent fiscal policy. Substantial fiscal reserves have insulated government funding from the volatility of financial market conditions, and have buffered the economy against shocks, particularly in the absence of a discretionary monetary policy. Sound fiscal management has also reinforced the credibility of the Linked Exchange Rate system.

Full publication: Fiscal Policy, Public Debt and Monetary Policy in Emerging Market Economies.

Keywords: Foreign exchange reserves, peg, deficit, fiscal policy

JEL Classification: E52, F31, H62

Suggested Citation

Monetary Authority, Hong Kong, The Importance of Fiscal Prudence Under the Linked Exchange Rate System in Hong Kong SAR (October 1, 2012). BIS Paper No. 67k, Available at SSRN: https://ssrn.com/abstract=2205647

Hong Kong Monetary Authority (Contact Author)

Hong Kong Monetary Authority

3 Garden Road, 30th Floor
Hong Kong
Hong Kong

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