Business executives in Hong Kong and China mostly feel that the Hong Kong dollar will diminish in importance in the future as the mainland’s currency, the renminbi, gains ground on the global stage.
According to a survey conducted jointly by London Business School and the University of Hong Kong, as many 62 percent of corporate honchos believe the Hong Kong dollar will see its status get reduced as renminbi usage increases outside China.
Market observers deem such expectation as reasonable although it does not mean the end of Hong Kong’s currency, the Hong Kong Economic Journal reported Thursday.
The Hong Kong dollar is likely to remain in use locally, like the pataca in Macau.
The survey results are based on interviews with 225 business executives in Hong Kong and China.
Sixty-two percent of the respondents currently prefer to use Hong Kong dollar to conduct business transactions, while those who identified the renminbi as their main currency stood at 21 percent.
Forty-one percent of the respondents expect the renminbi to be able to compete with major global currencies — such as the US dollar, euro, sterling pound and the Japanese yen — in five to 10 years while 39 percent believe such a thing could become a reality within five years.
Forty-six percent are of view that more offshore institutions and individuals will own renminbi-denominated assets, resulting in a high percentage of international reserves in the Chinese currency.
A Hong Kong Monetary Authority spokesperson, meanwhile, asserted that Hong Kong dollar’s status as the city’s currency will not change.
The government has no intention or need to alter the local unit’s existing peg with the US dollar, the spokesperson added.
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