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Strategies & Market Trends : HONG KONG

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To: Frodo Baxter who wrote (2162)	8/26/1998 9:13:00 AM
From: tom	Read Replies (1) of 2951

Dollarisation is an interesting concept and I have mentioned it several times before on this thread (or possibly the Asia Forum). However, I have come to the conclusion that the rot in Hong Kong is so deep that dollarisation will do little to help them. Even if they use US$, asset prices will still need to correct as the fundamental situation has not changed (ie fears of the banking system's solvency/liquidity). HK borrowers would still need to pay a big premium to borrow in US$. Apparently China has discussed the possibility of dollarisation and would be open to the idea if the situation warranted such drastic action.

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