HK Chief Executive-Elect: Won't Alter HK Dollar Peg To US Dollar

Hong Kong's next leader, Leung Chun-ying, said Wednesday he won't alter the Hong Kong dollar's peg to the U.S. dollar after he takes office, noting that the fixed exchange rate is serving the city well.

Leung spoke at a briefing Wednesday, three days after the city's elites elected him chief executive by a narrow margin in the most contentious leadership race to date.

He will replace incumbent chief executive Donald Tsang, whose term ends June 30.

Hong Kong's government pegged the local currency at HK$7.80 to the U.S. dollar in 1983 as part of a currency board system, amid mounting uncertainty about the city's 1997 handover to Chinese rule.

The city's government, which manages its own financial and political systems separately from those of mainland China, has reiterated that the peg is the cornerstone of its monetary policy, thus requiring that local interest rates move in lock-step with those of the U.S.