Jump to ContentJump to Main Navigation
Hong Kong's Link to the US DollarOrigins and Evolution$
Users without a subscription are not able to see the full content.

John Greenwood

Print publication date: 2007

Print ISBN-13: 9789622098909

Published to Hong Kong Scholarship Online: September 2011

DOI: 10.5790/hongkong/9789622098909.001.0001

Show Summary Details
Page of

PRINTED FROM HONG KONG SCHOLARSHIP ONLINE (www.hongkong.universitypressscholarship.com). (c) Copyright Hong Kong University Press, 2022. An individual user may print out a PDF of a single chapter of a monograph in HKSO for personal use.date: 28 May 2022

Negative Interest Rates A Comparison of the Hong Kong and Swiss Schemes

Negative Interest Rates A Comparison of the Hong Kong and Swiss Schemes

January–February 1988

(p.217) Chapter 10 Negative Interest Rates A Comparison of the Hong Kong and Swiss Schemes
Hong Kong's Link to the US Dollar

John Greenwood

Hong Kong University Press

This chapter highlights two aspects of the negative interest rates schemes. First, the Swiss authorities had imposed a similar scheme when the Swiss franc had been under upward pressure in 1977–78, so a comparison of Hong Kong and Swiss schemes is useful. It would appear from these two cases that small, open economies with sound monetary arrangements are vulnerable to unwelcome speculative inflows whenever the currency to which they are pegged experiences a prolonged episode of weakness. The implication is that there must be enough flexibility in the smaller economy to absorb such pressures if the inflows are not to be permanently disruptive. Second, this was an interim attempt to deal with some of the side-effects of speculative pressure on the Hong Kong dollar before the introduction of the new “accounting arrangements” in July 1988 that gave the authorities more direct control over the money markets and more influence on the spot rate. The negative interest rate scheme was significant but ultimately of second-order importance in the restoration of credibility in Hong Kong's currency board.

Keywords:   negative interest rate, Swiss franc, monetary arrangements, accounting arrangements, spot rate, money markets, currency board

Hong Kong Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .