The pros and cons of continuing with the current policy

Assignment Help Financial Management

Reference no: EM131863215

For over 30 years, the Hong Kong has pegged its currency, the Hong Kong dollar, to the US dollar. At the same time, Hong Kong places hardly any restrictions on capital flows into or out of Hong Kong. From time to time, the question comes up whether Hong Kong should continue to peg its currency to the US dollar or switch to something else – such as peg its currency to a basket of currencies rather than just the dollar, or peg its currency to the Chinese renminbi, or perhaps just switch to a floating exchange rate system. Discuss the pros and cons of continuing with the current policy of a peg to the US dollar. Your answer must include implications of the theory of the impossible trinity.

Reference no: EM131863215

Questions Cloud

Emergency planning and management : In relation to Emergency Planning and Management, I-78 is an interstate highway that goes through many municipalities and counties

Compare the slas in terms of two other criteria : Does each vendor count both scheduled down- time and planned downtime toward the SLA uptime percent?Compare the SLAs in terms of two other criteria.

Good record-keeping system : Why is it as important to have a good record-keeping system for a small business, as it is for a corporation?

Communicate about the security design of their systems : Application designers should be aware that their applications may be subject to a denial of service attack.

The pros and cons of continuing with the current policy : Discuss the pros and cons of continuing with the current policy of a peg to the US dollar.

Consequences regarding employee rights : Question: What are some of the benefits or consequences regarding employee rights.

Skills exhibited by an effective manager : Identify your particular areas of strength and discuss opportunities for your own development as a manager.

Manufacturer of overhead conveyor trolleys : Frost. Inc. is a manufacturer of overhead conveyor trolleys, used primarily in the auto industry. With sales of $20 million, Frost is located in Grand Rapids.

Covered interest arbitrage opportunity : Is there a Covered Interest Arbitrage (CIA) opportunity here? Explain why or why not with calculations?

User Account

All Pages