Magazine article Business Asia

Old Concepts Back in Vogue at Forum Talks

Magazine article Business Asia

Old Concepts Back in Vogue at Forum Talks

Article excerpt

Two old economic chestnuts -- a single Asian currency and an East Asian emergency fund -- dominated talk at this month's World Economic Forum meeting in Singapore.

Hong Kong Financial Secretary Donald Tsang added fuel to the single currency debate by apparently suggesting the possibility of a single Hong Kong/Singapore currency and de-pegging of the Hong Kong unit. Other Asian nations could later join the scheme.

However, Tsang's office then backed away from the statement, claiming that the Financial Secretary was quoted "out of context" and that he "has always stressed the importance of the linked exchange rate system to Hong Kong".

The reputable Straits Times newspaper had reported that Tsang suggested the possibility of Hong Kong and Singapore moving to a common currency, adding that Hong Kong would be willing to give up its peg to the US dollar in order to join the scheme.

"We are thinking in terms of a horizon of five to seven years. Everyone will have to make a compromise somewhere," the newspaper reported him as saying.

"I feel brave and courageous even uttering these words. It's the unthinkable. But we must think of the unthinkable now," he said in an interview with the English-language daily.

Trying to hose down the comments, Tsang's office said he had been responding to the issue of a possible Asian monetary union.

He had remarked on the feasibility of a concept in "the very long term".

The Monetary Authority of Singapore (MAS) has all along been cautious over internationalising the Singapore dollar. …

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