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Daisy Wu

The Hong Kong dollar’s four-decade-old peg to the US dollar is facing fresh calls for review, after a local financial industry body urged greater use of the yuan and floated the idea of shifting to a basket of major currencies and gold – though financial analysts argue the current system is likely to remain in place.
The proposal to revisit the pegged exchange rate system was submitted this week by the Hong Kong Securities and Futures Professionals Association (HKSFPA), as the government gathers public feedback for its first-ever five-year plan.
Founded in 2002, the association recommended forming an independent expert committee to help chart the city’s financial future and examine potential currency reforms. It recommended that the committee be co-led by the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau.
“The peg to the US dollar cedes control over local monetary policy to the US Federal Reserve,” the association noted, citing financial pressure on local homebuyers and small businesses during recent rate-hike cycles.
“If Hong Kong clings to the old regime, any major dollar volatility or credit crisis would leave the Hong Kong dollar with no buffer, severely impacting financial markets, property prices and citizens’ retirement savings.”
The proposal coincides with a broader global debate about “de-dollarisation” as well as Beijing’s push to expand the yuan’s international use through Hong Kong’s offshore market.
There is no evidence that a basket of currencies is superior to the US dollar
Tommy Ong, T.O. & Associates Consultancy
However, market observers said the association’s recommendations would face an uphill battle to reach the government’s legislative agenda, let alone be acted on. Most local financial professionals and economists continue to view the peg as essential for maintaining market stability and ensuring prosperity.
“If we switch to a yuan peg, linking a freely convertible currency to a non-freely convertible one would be rare and highly complex,” said Kenny Tang Sing-hing, chairman of the Hong Kong Institute of Financial Analysts and Professional Commentators.
Exchange-rate stability, he added, was “one of the core values and driving forces” behind Hong Kong’s financial markets and should not be changed lightly.
Allen Ding, chief economist at China Citic Bank International, warned that sudden monetary shifts could trigger market instability, adding that “the true focus should remain on expanding the renminbi’s broader global adoption”.
That sentiment was echoed by Tommy Wu, a senior economist for Greater China and North Asia at Standard Chartered Bank, who described the existing peg as “a simple, transparent anchor” that international investors understood well.
“Currency stability is arguably more important for Hong Kong’s economy,” Wu said.


Tommy Ong, managing director of T.O. & Associates Consultancy, further noted that maintaining a separate anchor had reinforced Hong Kong’s strategic value to Beijing. A currency independent of the yuan, he added, gave Chinese enterprises and investors vital “operational flexibility” when tapping global markets.
“There is no evidence that a basket of currencies is superior to the US dollar,” Ong said, noting that Hong Kong could act as a bridge simply by expanding its array of offshore yuan products.
Hong Kong’s currency peg was introduced in 1983 to stabilise the local economy amid heavy selling pressure on the Hong Kong dollar.
Local authorities have repeatedly defended the existing framework, saying the linked exchange rate system remained the most suitable arrangement for Hong Kong’s economy.
In a January 2025 statement, the HKMA said the system had remained resilient through multiple economic cycles and financial crises, emphasising that it had “no intention” and saw “no need to change”.


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Economists and financial analysts warn abandoning the anchor would pose risks that far outweigh potential rewards


Economists and financial analysts warn abandoning the anchor would pose risks that far outweigh potential rewards.


Hong Kong’s US dollar peg faces fresh calls for review – but is change feasible?

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Economists and financial analysts warn abandoning the anchor would pose risks that far outweigh potential rewards

Economists and financial analysts warn abandoning the anchor would pose risks that far outweigh potential rewards