Hong Kong should review its US dollar peg and consider linking its currency to the renminbi, according to Joseph Yam, former head of the Hong Kong Monetary Authority.

Mr Yam, who ran Hong Kong’s de facto central bank for 16 years until 2009, is the most influential person to suggest such a move.

Ending the US dollar peg after nearly three decades would be hugely symbolic as a sign of China’s increasing economic dominance in Asia.

“Nothing is absolute or sacrosanct,” said Mr Yam, who waged war against George Soros in 1998 to protect the Hong Kong peg during the Asian financial crisis.

Mr Yam suggested that gradually replacing the dollar peg with greater reliance on the renminbi made sense as Hong Kong’s economy has become increasingly integrated with that of the Chinese mainland.

– (The Financial Times)