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
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: Suggested Citation