The Wealth Empire Crossing the Hong Kong

Chapter 507 Hong Kong Dollars
Not long after Li Jianhui and others returned to Xiangjiang, they received an invitation from the Financial Secretary to attend the Xiangjiang Financial Conference held by Financial Secretary Wilms at [-]:[-] the next morning.

Originally, Li Jianhui, Li Guobao and others only thought that this meeting was to deal with the exchange of foreign exchange by many citizens and institutions in recent days, but they did not expect that the topic was bigger than everyone expected.

Since 1972 when the British pound realized a floating exchange rate, the Hong Kong dollar has been decoupled from the British pound and no longer has a fixed exchange rate with the British pound. In recent years, the two major note-issuing banks, HSBC and Standard Chartered, have paid British pounds, U.S. dollars and other foreign currencies to the foreign exchange fund of the Monetary Authority. Certificate of Indebtedness, after which Hong Kong dollars will be issued according to the exchange rate.

Although the Hong Kong dollar fell for a period of time due to economic factors in the mid-70s, the exchange rate between the Hong Kong dollar and the U.S. dollar has basically remained at around 5.1 with the rise of the Xinjian Department in recent years. Even if there was a foreign exchange run, there was still no major fluctuation. There is no need to modify the current policy.

Today, however, Wilms mentioned that the Hong Kong dollar and the pound sterling have re-implemented a fixed exchange rate, and these financial elites present are naturally unwilling to accept it.

Due to the economic development problems in England, the exchange rate between the British pound and the Hong Kong dollar has been falling in the past few years. Once the Hong Kong dollar and the British pound are fixed, Hong Kong's economy will inevitably suffer heavy losses.

As the banner of the Chinese in Xiangjiang Finance, Li Guobao took the lead and said: "Mr. Wilms, I believe you are very clear about the current situation of the British pound and the Hong Kong dollar. Don't you think we are all fools?
It is absolutely impossible for the Hong Kong dollar and the British pound to implement a fixed exchange rate. We can only accept the British pound as a kind of foreign exchange for our Hong Kong dollar issuance and payment in Hong Kong, and maintain a floating exchange rate. We will never let the Hong Kong dollar only be linked to the British pound. "

Afterwards, Feng Jingyao, Feng Jingxi, Qiu Degen and others spoke one after another, all opposing Wilms' proposal.

Wilms dared to mention it, so naturally there is no shortage of supporters. As one of the Hong Kong dollar banknote issuing banks, Shen Bi, the head of HSBC, said:

"Everyone is aware of our Hong Kong dollar issuance system. Before issuing Hong Kong dollars, we need to pay a fixed amount of foreign exchange to the Exchange Fund and obtain a certificate of indebtedness.

At present, we are implementing a floating exchange rate. The appreciation of our Hong Kong dollar means the depreciation of foreign exchange, which leads to the fact that the value of our foreign exchange payment is not enough to offset the currency we issue. If this problem is not resolved as soon as possible, the holes in it will become more and more in the future. bigger.

Only by implementing a fixed exchange rate can Hongkong Financial have no problems and our Hong Kong dollar issuance system can continue to be maintained. "

"Shen Bi, it's almost enough for you to fool people who don't know it. Our Hong Kong dollar exchange rate basically depends on the foreign exchange paid into the exchange fund by your two major banks. If the currency in the exchange fund falls, our Hong Kong dollar will also fall.

I also think that this kind of currency issuance system is outdated. I think our Hong Kong dollar should be issued with gold reserves to get rid of the kidnapping of our Hong Kong dollar by currencies such as the British pound, the US dollar, and the Japanese yen. Well safeguard the interests of our Xiangjiang. "

Wilms had received instructions from the local government, so he naturally would not agree with Li Jianhui's opinion, and the gold standard system has been abandoned by all parties, so he is naturally unwilling to build a Hong Kong dollar gold standard system.

Pix, head of Standard Chartered Hong Kong, retorted: "Over the past century, more and more countries have proved that the gold standard system is not conducive to their economic development at all.

Moreover, the price of gold fluctuates considerably. If the Hong Kong dollar is pegged to gold, it will not be conducive to the stability of Hong Kong's economy at all.

The British pound is currently the second largest currency in the world, and it is also the currency with the highest equivalent value. Linking the Hong Kong dollar to it will certainly increase the international purchasing power of the Hong Kong dollar. "

Representatives of Chinese-funded banks obviously do not agree with Pixar's point of view. The current exchange rate of the Hong Kong dollar is stable and the economic development is not bad. There is no need for the Hong Kong dollar to depreciate or appreciate.

Once the exchange rate with the British pound is fixed, if it is set high, the Hong Kong dollar will appreciate, which is not conducive to Hong Kong's export economy. If the current exchange rate is maintained, the Hong Kong economy will suffer heavy losses due to the continued decline of the pound.

However, what Shen Bi mentioned cannot be ignored. If we continue to maintain the current system of paying foreign exchange issuance with a floating exchange rate, there may be serious problems in the future.

The pound cannot be linked, and Li Jianhui is far more willing to see it linked to the US dollar as in his previous life.

After thinking for a while, he said: "Our Hong Kong dollar cannot be pegged to a single currency. In order to solve some drawbacks of the current issuance system, we should adopt a parallel system of gold and foreign exchange payment.

If HSBC and Standard Chartered are unwilling to bear the risks involved, we, Xinjian Bank, are willing to undertake the issuance of Hong Kong dollars to safeguard the financial stability of Hong Kong and the interests of Hong Kong citizens. "

Not to mention that Shen Bi and Pixar were unwilling to see Xinjian Bank intervene in the issuance of Hong Kong dollars, even Wilms was unwilling to see it.

The exaggeration of the current issuance system is actually not a big problem at all. The depreciation of foreign exchange and the Hong Kong dollar follow suit. No matter Standard Chartered or HSBC, there is no need to bear losses at all.

Today, they mainly hope to promote the peg between the Hong Kong dollar and the British pound, so that it can return to the situation ten years ago.

This is also because of Li Jianhui's butterfly effect, which makes Yinglun more ambitious than in his previous life, hoping that the pound can return to its peak.

This time, England doesn't just want to peg the Hong Kong dollar to the British pound. The other party is also contacting the countries of the Commonwealth of Nations, hoping to establish a fixed exchange rate system between local currencies and the British pound.

If it is not possible, I also hope that the import and export trade between the Commonwealth regions can be settled in pounds, so as to enhance the status of pounds in the global currency.

In order to achieve the goal as much as possible and kidnap the Hong Kong dollar on the chariot of the British pound, Wilms said: "At present, the foreign exchange fund is mainly based on the US dollar, and the US economy has also been in a downturn in recent years, and there are too many US dollars in foreign exchange. It is not conducive to the stability of the Hong Kong dollar and Hong Kong's economy.

With the rapid development of Hong Kong's economy in recent years and the continuous improvement of Hong Kong's economic status in the world, we must make new changes to meet the needs of Hong Kong's economy.

......"

Although Wilms talked about a bunch of benefits of pegging to the British pound, and also talked about the adverse effects of excessive US dollar foreign exchange on Xiangjiang, none of them could change the will of Li Jianhui and others.

Because they talked about the various drawbacks of the existing system this time, Li Jianhui and others specifically asked the Financial Administration to adjust the foreign exchange currency in a planned way, so as to avoid excessive devaluation of a certain currency and cause huge losses to the citizens of Xiangjiang.

At the same time, the Monetary Authority is required to increase fixed assets as a buffer, especially to increase gold reserves, so as to balance the impact of foreign exchange currency fluctuations.

After arguing for nearly two hours, a good result was not negotiated. It is impossible for Li Jianhui and others to make concessions, and Wilms and others are eager to promote the peg between the Hong Kong dollar and the British pound.

(End of this chapter)