The Research on a Currency Board System: The Case of Hong Kong

Abstract

The Currency Board System is a relatively old topic. But due to the successive increases of interest rates by the US Federal Reserve in 2022, the topic has received attention again. This paper will analyse the Currency Board System through a typical example-Hong Kong. Firstly, the background of Currency Board System will be described. Then three conditions for the success of the Currency Board System will be analysed in the third part. After that, the suitable types of economy to apply the Currency Board System will be pointed out. Finally, it is recommend that different countries with different economic environment are better rationally implement the suitable exchange rate regime.