HONG KONG (AP) _ Hong Kong will review the steps it has taken to defend its currency over those measures appear to have triggered a week of global stock turmoil.
Financial Secretary Donald Tsang told reporters Sunday that Hong Kong has learned ``quite a few lessons″ in defending the its currency’s peg to the U.S. dollar. He said he was confident he has the ``right formula″ in protecting the currency, but that ``we have to look at the direct consequences of those actions.″
The review will ensure that if there is another round of speculative attacks against the Hong Kong dollar ``we will not only be able to deal with speculators, we will make sure the ramification for Hong Kong as a whole will be less,″ he added.
The stock market meltdown began on Oct. 20 when speculators, who had earlier driven down Southeast Asia’s currencies, decided that the Hong Kong dollar was overvalued at 7.80 to the U.S. dollar, and went on the attack.
Interest rates soared as the Hong Kong government moved to defend its currency, triggering stock market selloffs in Hong Kong and later throughout the world.