Hong Kong prepares for possible inflation

Hong Kong prepares for possible inflation

2011-01-14 08:32:03 GMT+7 (ICT)

HONG KONG (BNO NEWS) - Hong Kong's Chief Executive Donald Tsang on Thursday warned that the country is facing inflation, the state-run Xinhua news agency reported on Friday.

Tsang added that the government needs to address the impact of potential inflation on the public immediately and introduce relief measures if necessary. "We will be on guard against inflation in the coming year, and we will seize the opportunity to promote economic growth which will generate stable tax revenue," Tsang said.

To minimize the impact on people, public resources should be allocated to areas that will improve competitiveness and people's livelihood, promote social mobility and help the disadvantaged, Tsang added during a session in the city's Legislative Council.

The chief said Hong Kong's linked exchange rate system has been working well for almost 30 years, affirming that there is no room for de-linking Hong Kong's currency from the U.S. dollar.

"A stable exchange rate is crucial to Hong Kong because it heavily relies on trade. Any unfavorable changes will cause adverse impact to the city's economy," Tsang added.

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