Abundant liquidity in the region has raised the risk of a sudden hike in capital outflows, the chief executive warned yesterday, vowing to launch any measure needed to ensure the smooth operation of the local financial market.存倉 ``The global flow of hot money has induced risk of a reverse flow of capital within Asian regions. Also, it remains an unknown of when the central bank of the United States and other nations start tapering. Thus, the direction of market development is uncertain,'' Leung Chun-ying told an economic seminar. But he said no matter what happens, Hong Kong will continue to play a key role in China's financial sector reform. The SAR can act as a ``superconnector'' to bring foreign firms to the mainland market, as well encourage them to trade in yuan using Hong Kong as a platform, Leung said. Secretary for Financial Services and the Treasury Ceajar Chan Ka-keung said it is better for the US Federal Reserve to start tapering earlier because the later it starts, the higher the risk it will pose amid abundant liquidity in the market. Although it is hard to estimate the exact timing, Hong Kong is certain to be affected by the rise in interest rates 儲存as a result, Chan said at the seminar, titled the Economic Summit 2014. But he is confident about the territory as the local equity and initial public offering markets are quite healthy. However, economist Lawrence Lau Juen-yee, chairman of CIC International (Hong Kong), warned of a possibility for the US Fed to start scaling back its asset purchases this month. His view contrasts sharply with those of HSBC and Hang Seng Bank (0011), which expect tapering to start by the first quarter next year. Lau said the quantitative easing has limited impact on the US economy and is merely a tool to depreciate the greenback and boost the competitiveness of American exports. George Leung Siu-kei, HSBC's adviser for Asia-Pacific strategy and economics, predicts the Fed will not raise its benchmark interest rate even after 2015, as the tapering will be a slow process. This would bode well for Hong Kong as it can follow the lead in maintaining low interest rates. On the topic of bitcoins, Chan said the government will monitor the digital currency, but will take no administrative measures unless something illegal happens or is about to happen. imogene.wong@singtaonewscorp.com 迷你倉
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