Foreign exchange market Hong Kong or the Hong Kong foreign exchange market is one of the largest in the world. To put the fact in a more specific manner, the foreign exchange market of Hong Kong is the fifth largest in the world. The country is one of the leading financial centers in the world because of the high performance levels achieved by this market.
This is recognized by both the governments of China and Hong Kong and according to the Basic Law, the IFC status achieved by Hong Kong should be maintained by the country.
The following are the reasons for the excellent performance of the foreign exchange market in Hong Kong:
The financial and trade tie ups with China
Free business environment
No Foreign Exchange and capital controls
Low operation costs
The country is an international financial center
The financial professionals in the country are very efficient and well-trained
The Hong Kong Monetary Authority (HKMA) recognizes the need to keep up the good work done by the foreign exchange market Hong Kong.
The reasons behind the high growth rate experienced by the FX market of Hong Kong are as follows:
Scope of both regional and international trade
The fact that the country is an IFC
The FOREX market of Hong Kong broadly works on the principles of the laissez-faire theory, which means that over both the long and short-term period, the market is let to take care of itself. The linked exchange rate system is followed in Hong Kong and this helps in maintaining the stability of the Hong Kong dollar. This stable exchange rate is a key factor in maintaining economic and political stability in the country. This link exchange rate system was introduced in the country in October 1983. The linked exchange rate against the United States dollar is stipulated at a rate of $7.80 to US $1.