Chapter

The Impact of The Tiananmen Square Incident on Hong Kong'S Monetary System

John Greenwood

in Hong Kong's Link to the US Dollar

Published by Hong Kong University Press

Published in print November 2007 | ISBN: 9789622098909
Published online September 2011 | e-ISBN: 9789882207004 | DOI: http://dx.doi.org/10.5790/hongkong/9789622098909.003.0013
The Impact of The Tiananmen Square Incident on Hong Kong'S Monetary System

Show Summary Details

Preview

This chapter describes the response of the currency board mechanism in Hong Kong, as amended by the new accounting arrangements of July 1988, to the crisis in Beijing surrounding the Tiananmen Square demonstrations of May/June 1989. It argues that there was both an “internal drain” (in the form of a withdrawal of funds from the Bank of China) and an “external drain” (an outflow of funds through the sale of HK$ for foreign currencies). It also discusses how these events impacted the Hong Kong monetary system — from the response of the authorities, interest rates, and the spot rate for the HK$/US$ to the internal fund shifts and the outflow.

Keywords: currency board; accounting arrangements; Tiananmen Square; Bank of China; monetary system; interest rate; spot rate; internal fund

Chapter.  3104 words.  Illustrated.

Subjects: Business and Management

Full text: subscription required

How to subscribe Recommend to my Librarian

Buy this work at Hong Kong University Press »

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.