A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
ECON 103 International Economics A Section G12 Topic Topic 5: A Tale of Two Two Exchange Exchange Rate Systems: Systems: Singapore and Hong Kong. Kong. How well have their respective monetary/exchange rate systems served their economies
Prepared For: !rofessor "ong #ot $hyi
Prepared !: $hong H%ai &iao H% 'heng(in )ee Kang "ee *orit+ ,a%mann Randy -ng Kee *eng
CONTENTS
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong Execti!e Smmary.................... .............................. ..................... ...................... ..................... ....................................... ............................. 2
................................ ..................... ..................... ...................... ..................... ..................... .......................... ............... 3 "# $ntrodction..................... "#" The $mpossi%le Trinity and Choices of the Cities ................................3
................................ ..................... ..................... ..................... ..................... ..........4 4 "#& E'ecti!e Exchange Rate...................... "#( Economic Strctre of Singapore and Hong Kong ..............................4 &# Analysis Analysis of of $mpact $mpact of Exchange Rate Systems Systems ) Side*%y*Side Comparison of Singapore and Hong Kong .....................................................6 &#" Economic Sta%ility * $n+ation.................................................................6 &#& Economic Sta%ility * ,nemployment.....................................................7
................................ ..................... ..................... ..................... ...................... ............8 8 &#( Economic -rowth * -./ ..................... � Economic -rowth * Openness to Trade ...............................................10 (# Case Stdy Analysis..................... ................................ ..................... ..................... .......................................... ............................... 11 (#" Asian 1inancial Crisis 2"3345 ................................................................11 (#& -lo%al 1inancial Crisis 2&6675.................... ............................... ..................... ..................... ......................13 ...........13 0# Conclsion..................... ................................ ..................... ..................... ...................... ..................... ..................... ..................... ................ ...... 15 8i%liography .................... ............................... ..................... ..................... ..................... ..................... ...................... ............................. .................. 16
1
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
E9EC,T$E S,;;AR< Singapore and Hong Kong are 2 city states that share so many similar characteristics and economic traits. Howeer! "oth o# these co$ntries% e&change rate regimes are drastically di'erent #rom each other. (his paper compares and contrast the two di'erent e&change rate regimes! and attempt to determine how well has these regimes sered their respectie co$ntries. )$e to the *mpossi"le (rinity! co$ntries cannot achiee #ree capital +ow! ,&ed e&change rate and soereign monetary policy all at the same time. Hence with small and open economies! Singapore and Hong Kong re-$ires #ree capital +ow into their economies. (his res$lts in Singapore choosing a managed +oat e&change rate regime and Hong Kong selecting a c$rrency "oard system! pegged to the S dollar. Singapore and Hong Kong possess two ery di'erent economic str$ct$res! where the man$#act$ring sector contri"$tes largely to Singapore%s economy! $nli/e Hong Kong. hile the two di'erent e&change rates regimes no do$"t hae an impact co$ntries% economic str$ct$re! it is neither the main nor sole ca$se #or the di'erent str$ct$res. ather! political in+$ence is shown to "e the main #actor in shaping the str$ct$re o# Singapore and Hong Kong%s economies. Singapore enoys more economic sta"ility! where its in+ation and employment rates are generally more sta"le than Hong Kong%s. er the years! Singapore%s in+ation rates are less olatile! and lower than Hong Kong. *n addition! Hong Kong e&periences a more employment rates in recent years and ta/es a longer time to recoer a#ter recessions. oth e&change rate regimes hae sered their respectie co$ntries well in term o# economic growth. Singapore and Hong Kong hae similar economic growth patterns and international trade. Howeer! Singapore enoys higher economic growth and per#ormance oer the years. astly! thro$gh the rigoro$s analysis o# two case st$dies! Singapore%s managed +oat e&change rate regime is deemed to hae o$tper#ormed the c$rrency "oard o# Hong Kong. oth economies are per#orming well to e&isting e&pectations altho$gh Singapore stands o$t as a more s$ccess#$l model o# an intermediate 2
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong #oreign e&change regime "y re+ecting a #aster and stronger economic recoery as opposed to Hong Kong.
"# $NTRO.,CT$ON Hong Kong and Singapores economy are small! open and e&portoriented. (he two cities also sere their regions as a maor trading port and regional ,nancial centre. )espite the similarities! Hong Kong and Singapore di'ers greatly in their e&changerate system and monetary policy. Hong Kong #ollows c$rrency "oard system and pegged their c$rrency to nited State at a ,&ed rate o# 7.8! while Singapore adheres to a managed +oating system where the c$rrency al$e is managed against a "as/et o# twele c$rrencies. *n this paper we ,rst loo/ at the "asis #or the choosing o# e&change rate system. Second! we e&amine the economic str$ct$re o# "oth co$ntries! and e&amine the di'erences "etween the 2 nations and see i# the di'erences are d$e to the e&change rate policies. e&t! we analyse the implication o# the two cities e&changerate system on the growth o# their economy. astly! we loo/ at how the e&change rate system o# the two cities de+ects impact #rom the 9ast :sian ;inancial
"#" THE $;/OSS$8=E TR$N$T< AN. CHO$CES O1 THE C$T$ES ;or a co$ntry to choose a s$ita"le e&change rate system! they m$st adhere to a restriction called the impossi"le trinity to ens$re economic sta"ility. : co$ntry cannot adopt an e&change regime that achiees e&change rate sta"ility! monetary policy a$tonomy and #ree capital moement >Hamada ? @os$/e! 2001A >
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong Hong Kong chose to esta"lish a c$rrency "oard system in 1=83! pegging its e&change rate to S )ollar. (heir impending ret$rn o# soereignty to D:S! 2001A! promoting price sta"ility and economic growth while presering the p$rchasing power o# Singapore )ollar >SE)A is their main o"ectie #or choosing a managed +oat regime. (he managed +oat regime /ept in+ation rates low and sta"le and appreciate grad$ally oer time thro$gh a so#t peg to Singapore%s maor trading partners. (he regime also allows goernment to manage h$ge mar/et shoc/s and spec$lation thro$gh direct meas$res s$ch as "$ying and selling in the #oreign e&change mar/et.
"#& E11ECT$E E9CHAN-E RATE (o hae a "asis #or comparison! we will loo/ at the nominal and real e'ectie e&change rate #or the two cities. ominal 9'ectie 9&change ate >99A is the $nad$sted weighted aerage o# a pool o# #oreign c$rrency against the domestic c$rrency. eal 9'ectie 9&change ate >99A is the in+ationad$sted al$e o# the 99. 99 is $sed as a mean to determine nominal appreciate or depreciation o# the domestic c$rrency! while 99 is $sed to determine the p$rchasing power o# domestic c$rrency against the #oreign c$rrency.
"#( ECONO;$C STR,CT,RE O1 S$N-A/ORE AN. HON- KONSince "oth co$ntries are small geographically and are "oth e-$ipped with little reso$rces! they sho$ld act$ally #eat$re the same distri"$tion o# the three sectors agric$lt$re! man$#act$ring and serices. oth co$ntries hae $ndergone a rapid 4
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong shi#t towards more /nowledge"ased actiities and clim"ed $p the al$echain d$ring the last decade. )espite these similarities! the economic distri"$tion di'ers "etween the 2 co$ntries. 9en tho$gh the Eross )omestic Frod$ct o# Singapore! which was worth 362.7 "illion S )ollars in 2012! is -$ite similar to the E)F o# Hong Kong! which was 363.7 "illion S )ollars >*nde&m$ndiA! there are some di'erences in the siCe o# the man$#act$ring and the serices sector. (he agric$lt$ral sector acco$nts #or 0G o# E)F in "oth co$ntries! li/ely d$e to the lac/ o# h$man capital and land reso$rce. Howeer! the man$#act$ring sector in Singapore is m$ch larger! contri"$ting to 27.8G o# E)F compared to that o# Hong Kong! where E)F contri"$tion is only 7G. (he di'erence o# 20.8G goes into the larger serice sector in Hong Kong! which acco$nts #or =3G. whereas in Singapore! this sector only contri"$tes to 72.2G o# the E)F. 9en witho$t the p$"lic sector! serices in Hong Kong still acco$nt #or 84G o# E)F >Hong Kong Eoernment! 2013A. (hese are signi,cant di'erences. e co$ld s$ggest that the roots o# these ine-$alities are the di'erent e&change rate regimes in Singapore and Hong Kong. $t in #act! there is a way more simple reason that acco$nts #or the di'erences. (he post1=78 economic re#orms o# the @o$ng! 1==2A persons per s-$are mile! which contri"$ted to a shortage o# ind$strial +oor spaces within the city. (his change ena"led Hong Kong to specialiCe in /nowledge"ased serices li/e trade and ,nancial serices! which o$treaches Singapore "y #ar. Singapore is also e-$ipped with ery little nat$ral reso$rces and space! "$t nonetheless! it still has a larger man$#act$ring sector than Hong Kong. Singapore! in contrast to Hong Kong! is not politically connected to any other co$ntry. :s a res$lt! it is $na"le to moe its man$#act$ring sector oerseas as easily as Hong Kong. :nother reason #or the moement o# the man$#act$ring sector to
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong :nderlini! 2012A! this arg$ment has "een wea/ened! "$t the impacts still remain. (here is little e&change rate ris/ in Hong Kong moing its entire man$#act$ring sector oerseas to
6
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
&# ANA=
&#" ECONO;$ C STA8$=$T< * $N1=AT$ON 14 12 10 8 6 4 2 0
Hong Kong S: *n+ation! aerage cons$mer prices Fercent change Singapore *n+ation! aerage cons$mer prices Fercent change
2 4 6
;ig 1. >*nternational Donetary ;$ndA
;rom 1=80 to 2013! Singapore%s in+ation is an aerage o# 2.26G! while the aerage in+ation in Hong Kong is 4.64G >;ig 1A. n the whole! Singapore has seen m$ch lower in+ation rates compared to Hong Kong. *n recent years! the only period when Singapore e&perienced a higher in+ation rate than Hong Kong was d$ring the 2008 glo"al ,nancial crisis. 9en then! Singapore -$ic/ly recoered in the #ollowing years. Singapore%s e&change rate policy has "een #airly s$ccess#$l in protecting itsel# #rom e&ternal economic shoc/s. (he o"seration o# Singapore enoying lower in+ation rate than Hong Kong is not s$rprising! as the monetary policy o"ectie in Singapore is to attain low in+ation rates in order to promote price sta"ility as a "asis #or s$staina"le economic growth >D:S! 2001A. *n+ation patterns are closely related to the e&change rate policies o# "oth nations. (his is most distinct d$ring periods o# strong economic growth in the 7
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong world. ;rom 1=88 to 1==5! economic conditions were strong! and Hong Kong and Singapore saw strong E)F growth >;ig 3A. ominal e&change rate was allowed to appreciate in Singapore! which o'sets the impact on in+ation >D:S! 2001A. (he in+ation rates d$ring that period were low at 2.35G. *n contrast! Hong Kong saw an aerage in+ation o# 8.7=G. *n Hong Kong! the monetary policy is aimed at achieing a sta"le nominal e&change rate against the S)! which res$lted in no monetary policy responses to in+ation >Eerlach ? EerlachKristen! 2006A. *n+ation was th$s allowed to soar. : similar o"seration can "e made d$ring periods o# wea/ening economic conditions d$ring the mid1=80s. Singapore%s e&change rate policy allowed it to /eep in+ation low d$ring the recessionary period "ro$ght a"o$t "y .S.:%s recession! which had a ripple e'ect on the rest o# the world economy. *n order to regain competitieness! Singapore allowed its 99 to depreciate in order to "ring down its 99 >D:S! 2001A. *n contrast! Hong Kong%s in+ation remained m$ch higher. erall! Hong Kong has seen higher in+ation rates! and also more olatile in+ation as compared to Singapore. (his is consistent with each nation%s monetary policy o"ectie. Singapore%s e&change rate policy allows it to respond m$ch -$ic/er to ario$s in+ation shoc/s! and allows it to control the in+ation leels.
n the other hand! Hong Kong places a #oc$s on ,nancial sta"ility
thro$gh lin/ing with .S.:.
&#& ECONO;$C STA8$=$T< * ,NE;/ =O<;ENT = 8 7 6 5 4 3 2
Hong Kong S: nemployment rate Fercent o# total la"or #orce Singapore nemployment rate Fercent o# total la"or #orce
1 0
8
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong ;ig 2. >*nternational Donetary ;$ndA *n general! "oth economies hae "een a"le to /eep $nemployment rates low. :s seen #rom ;ig 2! the aerage $nemployment rate #or Hong Kong #rom 1=80 to 2012 is 3.45G! while that o# Singapore is 3.17G. oth co$ntries are competitie! open economies! and $nemployment rates are generally /ept low! aro$nd the same leels all the way #rom 1=80 to 1==7. Howeer! we noticed an interesting pattern #rom 1==8 onwards! which was the onset o# the :sian ;inancial @ip! 2002A. ne reason #or this is that price and wages hae "een slow in ad$sting to economic shoc/s. ;rom the data o"sered! wages and prices hae "een in+e&i"le in ad$sting. :s Hong Kong is $na"le to in+$ence its 99 thro$gh monetary policies! its wages and prices hae remained high isis its peers s$ch as Singapore! where the 99 hae "een allowed to de+ate and hence lowering the wages and prices. :s prices in Hong Kong remained relatiely high a#ter the :sian ;inancial @ip! 2005A. (his is also e&acer"ated "y
=
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
E)F ><$rrent SIA 300000000000 200000000000 100000000000 0
SE E)F
HK E)F
E)F Erowth >ann$al GA 20 15 10 5 0 5 10 S E E)F ErowthG
HK E)F ErowthG
&#( ECONO;$C -RO>TH * -. /
;ig$re 3 depicts the E)F growth rates o# Singapore and Hong Kong #rom 1=83 to 2011. oth co$ntries e&perience relatiely high growth rates d$ring this period! as compared to the world%s aerage growth in E)F. )$ring this period! Singapore e&perienced an aerage E)F growth o# 6.54G while Hong Kong achieed an aerage o# 4.78G. (er"erg! 2012A. (h$s "oth e&change rate regimes seem to sere its respectie economies well. Howeer! oer the years despite showing ;ig 3 ;ig 4 similar trends in the spi/es and declines! it can "e o"sered #rom ;ig$re 3 that Singapore%s E)F growth rate is consistently higher than Hong Kong. Singapore%s real E)F ,nally oertoo/ Hong Kong%s in 2011! as shown in ,g$re 4! despite Hong Kong haing almost 2 times o# Singapore%s E)F in 1==7. )espite
haing
similar
demographics!
economic
policies
and
"$siness
enironment! "oth co$ntries e&perienced di'erent economic growth where Singapore o$tper#ormed Hong Kong in recent years. (his di'erence can "e e&plained "y the 2 di'erent e&change rate regimes. ne reason was d$e to 10
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong imported in+ation. Fegged to a wea/ening S dollar! Hong Kong%s e&change rate depreciated against its trading partners. Deanwhile @ip! 2005A. :nd since it pegged its c$rrency to the then increasingly strong S dollar! it co$ld not $se e&change rate depreciation to mitigate the aderse impacts. (his increased the "$rden o# price and wage ad$stment and deepened the recession. Hence its ina"ility to implement its own monetary policy adersely a'ected Hong Kong%s economic per#ormance. (his can "e #$rther s$pported #rom the #act that Singapore%s real E)F was relatiely +at a#ter mid1==7! whereas Hong Kong e&perienced a large contraction >)eere$&! 2003A.
11
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
� ECONO;$C -RO>TH * O/ENNESS TO TRA.E
$mport :ale $ndex 2&666?"665 300 200 100 0
SE
HK
;ig 5
;ig 6
Export :ale $ndex 2&666?"665 400 300 200 100 0
SE
HK
)espite haing 2 di'erent e&change rate regimes! ;ig$res 5 shows a stri/ingly similar trend in the imports and e&ports o# Singapore and Hong Kong. 9&port and import al$es hae seen a strong increase thro$gho$t the years. oth co$ntries hae high openness to trade! where e&ports o# goods and serices oer E)F #or Hong Kong and Singapore are at 222.=6G and 208.=5G respectiely >(rading 9conomicsA. Since Singapore has a small economy! it is essentially a price ta/er as it does not hae the a"ility to a'ect world price. (he high import content o# domestic demand means that domestic prices are $lnera"le to any change in world price 12
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong and e&change rate. ;$rthermore! the change in e&change rate will a'ect domestic demand and demand #or domestic reso$rces. (h$s! "y $tilising a managed +oating rate system! Singapore has "een a"le to maintain price sta"ility! strengthen its e&port demands thro$gho$t the years and control its in+ation leel. n the other hand! Hong Kong%s choice o# a ,&ed e&change rate regime has also sered it well in term o# international trade. *ntrod$ced to restore con,dence in Hong Kong dollar >@ip! 2005A! the ,&ed e&change rates regime helped its small "$t open economy. (he ,&ed e&change rate red$ced the cost o# e&change rate olatility! al"eit at the e&pense o# other economic aria"les s$ch as in+ation. ith the Hong Kong dollar pegged to S)! it is easier #or "$siness to estimate costs! determine pricing and #orecast reen$es! as they do not need to worry a"o$t losses d$e to +$ct$ations in e&change rates. (h$s despite Singapore and Hong Kong haing similar economic characteristics "$t di'erent e&change rate regimes! the systems adopted seem to hae sered its respectie economy well.
(# C ASE ST ,.< ANA=
(#" AS$AN 1$NANC$A= CR$S$S 2"3345 ;ollowing the :sian crisis d$e to the ,nancial meltdown o# (hai c$rrency! nations li/e So$th Korea and *ndonesia ac-$ired the greatest damage! #ollowed "y Hong Kong with s$"stantial impact and Singapore "eing least a'ected. eertheless! co$ntries thro$gho$t the region still s$'ered in terms o# trade per#ormance! namely e&port competitieness! gien that demand and con,dence sl$mped #rom all aro$nd. (he reason why Singapore proed to "e relatiely ins$lated #rom the shoc/ was primarily d$e to actie management "y the D:S in its monitoring "and mechanism which was accompanied "y a policy o# grad$al nominal e'ectie e&change rate >99A appreciation >;ig$re 7A. (he adantage o# deising +oating e&change rate lies in its +e&i"ility to ad$st the economy to adapt to #oreign price 13
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong shoc/s and s$stain a real e'ectie e&change rate that is constant with the economy%s macroeconomic #$ndamentals. *n 1==7! D:S engineered Singapore dollars to depreciate "y 20G to c$shion and steer the economy to a so#t landing >Dahinda ? :noma! 2003A. (his res$lted in relatiely sta"le domestic prices and allows nominal depreciation to translate into an $nderal$ed real e'ectie e&change rate >99A. ased on ;ig$re 7 and 8! Singapore%s 99 o$tplaced that o# its 99 while Hong Kong e&perienced stronger appreciation o# its 99 than 99 d$e to higher domestic in+ation rate. (his implies that Hong Kong%s oerall e&port per#ormance is lagging "ehind Singapore.
14
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
>;ig$re 7A
>;ig$re 8A
15
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
*n Hong Kong! the less transparent and more independent ,&ed e&change rate regime! were responsi"le #or growing misalignments o# the economy d$ring the crisis. )$ring the regional crisis! Hong Kong dollar "eing rigidly peg to the S) led to an oeral$ation o# the c$rrency #rom second -$arter o# 1==7. :longside with deal$ation o# Singapore c$rrencies! Hong Kong "ecame more s$scepti"le to spec$latie attac/ as large amo$nt o# reseres was necessary to hold the ,&ed e&change rate in place. :dditionally! they made no attempt to interene in their capital mar/et! $nli/e Singapore who sold "onds to raise long term ,nances. (here#ore! Hong Kong%s E)F #ell "y 5G while Singapore "eing one o# the #ew economies in 9ast :sia! achieed a positie growth o# 0.5G that year >am/ishen! 2000A.
(#& -=O8A= 1$NANC$A= CR$S$S 2&6675 (he glo"al ,nancial crisis is one where Singapore #aces sharpest economic downt$rn! een more seere than that o# the :sian ,nancial crisis. hile the impact o# :sian crisis was #elt immediately! the impact o# glo"al crisis was delayed and only "ite in d$ring the third -$arter o# 2008. *n :pril 2008! D:S decided to recentre the Singapore dollar e&change rate "and and contin$ed its #o$ryear appreciation policy. Howeer! in cto"er 2008 they read$sted its policy stance to Cero percent appreciation with no recentring o# the "and or change to the width. (hro$gh this period! the Singapore economy remains anchored "y so$nd #$ndamentals and resilient ,nancial system. nli/e the :sian crisis! there is no $nd$e wea/ening o# the c$rrency where Singapore dollars was allowed to depreciate against S) and appreciate against regional c$rrencies >im ? Jaya! 2010A. (here#ore! Singapore c$rrency was appreciating when the crisis occ$rred and only changed to a ne$tral and depreciating stance when e&ports pl$nge and in+ation started trending downwards. etween 200= and 2010 $nemployment rate #ell #rom 3G to 2.2G >;ig$re =A d$e to aaila"ility o# large pool o# #oreign wor/ers >< ? in! 2013A. (his proided "$'er against rising $nemployment d$ring the crisis and made the economy less $lnera"le compared to the :sian crisis preio$sly. (here#ore! while Singapore%s economy contracted in 200= as a res$lt o# the glo"al ,nancial crisis! it re"o$nded "ac/ in 2010 >;ig$re 10A thro$gh regained e&port competitieness. 16
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong ;or economies with a ,&ed e&change rate regime and per#ect cross"order capital mo"ility! s$ch as Hong Kong! haing ade-$ate ,scal scope to c$shion economic downt$rns is partic$larly important. nder a ,&ed e&change rate regime and with an open ,nancial acco$nt! the Hong Kong monetary a$thority cannot p$rs$e an independent monetary policy. esponding to the crisis! Hong Kong goernment instantly set #orth a series o# meas$res to sta"iliCe the ,nancial mar/et! #oster employment and #$nd "$sinesses. :s a serice economy! Hong Kong%s ,nancial sector was seerely impacted as prod$ctiity and employment declined >< ? in! 2013A. ;ort$nately! most "an/s in Hong Kong hae raised their proision leels and were s$Bciently capitaliCed to weather the crisis >)e$tsche an/ esearch 200=A. :dditionally! Hong Kong%s close ties with ;ig$re 10A! a recoery "egan in the third -$arter 200=! and the economy grew "y aro$nd 6.8G in 2010. >;ig$re =A
17
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
18
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
>;ig$re 10A
0# CONC=,S$ON (he more +e&i"le intermediate e&change rate regime in Singapore has o$tper#ormed the c$rrency "oard system in Hong Kong in general. Singapore has seen generally lower leels o# in+ation and $nemployment! as well as stronger growth. @et! that is not to say that Hong Kong sho$ld change their system as it inoles a highly complicated and diBc$lt sit$ation that they hae to weigh against their economy. ased on the two case st$dies! "oth economies are per#orming well to e&isting e&pectations altho$gh Singapore stands o$t as a more s$ccess#$l model o# an intermediate #oreign e&change regime "y re+ecting a #aster and stronger economic recoery as opposed to Hong Kong >im ? Jaya! 2010A. eertheless! while e&change rate policy co$ld "e one #actor $ndermining oerall recoery o# the two economies! so$nd instit$tional and economic #$ndamentals are e-$ally cr$cial in determining ,nancial sta"ility and growth o# the co$ntry. hile Singapore seems to adapt well to ,nancial crises! they are not spared #rom the e'ects! as seen #rom decreased growth and employment. *n addition to monetary policies! "oth co$ntries need to hae strong ,nancial #$ndamentals 1=
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong and so$nd macroeconomic policies to ens$re that the economy is less $lnera"le to e&ternal shoc/s.
8$8=$O-RA/H< :llen! ;.! ? 200=A. (he Elo"al ;inancial 14 :pril! 2012A. China relaxes currency peg. etrieed #rom ;inancial (imes httpLLwww.#t.comLintlLcmsLsL0Lc"e1"5#0861#11e18626 00144#ea"4=a.htmlMa&CC2m87rr:$thority! H. K. >2012A. (he importance o# ,scal pr$dence $nder the in/ed 9&change ate System in Hong Kong S:. Bank for International Settlements Papers No 67! 173177. rettha$e roo/! N. (. >2006A. : ;eminist :nalysis o# Fop$lar D$sic Fower er! "ecti,cation o#! and Oiolence :gainst omen. Journal of Feminist Family Therapy ! p2=51! 23. 2013A. *mpact o# the 2008 Elo"al ;inancial 2013A. :n :nalysis o# the Hong Kong 9conomy a#ter the ;inancial
2011A. &lo'al conomics >13 ed.A. So$thestern 2003A. : (ale o# (wo <$rrencies the :sian 2006A. %onetary Policy (egimes an" %acroeconomic *utcomes+ ,ong -ong an" Singapore. an/ #or *nternational Settlements . Hamada! K.! ? @os$/e! (. >)ecem"er! 2001A. (he 4A! 42=451. Hong Kong Eoernment. >2013A. ,ong -ong+ The Facts. *nde&m$ndi. >n.d.A. Singapore &2P 3 composition 'y sector . etrieed #rom *nde&m$ndi httpLLwww.inde&m$ndi.comLSingaporeLgdpQcompositionQ"yQsector.html
20
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong *nde&m$ndi. >n.d.A ,ong -ong &2P 3 composition 'y sector . etrieed #rom *nde&m$ndi httpLLwww.inde&m$ndi.comLhongQ/ongLgdpQcompositionQ"yQsector.html *nternational Donetary ;$nd. >n.d.A. 4orl" conomic *utlook 2ata'ase . etrieed 18 10! 2013! #rom *nternational Donetary ;$nd httpLLwww.im#.orgLe&ternalLp$"sL#tLweoL2013L02LweodataLinde&.asp& Kawai! D. >200=A. (he *mpact o# the Elo"al ;inancial 2010A. ;inancial i"eraliCation and the *mpact o# the ;inancial 2003A. 9'ects o# the :sian 9conomic 2001A. Singapores xchange (ate Policy. Singapore Donetary :$thority o# Singapore. Far/! <. @.! Da$ca! .! ? @ap! J. >2010A. (he 2008 ;inancial 2002A. Hong KongA or Donitoring and >SingaporeAR 5ustralian conomic Papers! 538556. am/ishen! . S.! ? Siregar! . >2000A. (he Oanishing *ntermediate egime and (ale o# (wo n.d.A. xport of &oo"s an" Ser#ices 89 of &2P: in ,ong -ong. etrieed #rom (rading 9conomics httpLLwww.tradingeconomics.comLhong/ongLe&portso#goodsand sericespercento#gdpw"data.html (er"erg! E. >27 7! 2012A. 5n *ptimistic nergy;&2P Forecast to 1<02002A. : )isc$ssion ote on Hong Kongs in/ed 9&change ate System and a Froposed e#orm o# Hong Kongs age System. ,-C( >etters. @ip! F. S. >2005A. n the Daintenance 1==2A. : (ale o# (wo 200=A. Hong Kongs 9conomy in (he ;inancial
A Tale of Two Exchange Rate Systems: Singapore and Hong Kong
22
