Wednesday, December 1, 2010

Hong Kong : Face High Inflation

Hong Kong will face higher inflation next year as it attracts more capital because of US monetary easing policies, and the appreciating Chinese Yuan increases food costs, Financial Secretary John Tsang said. The US measures may also boost energy prices, and the city’s government is “closely monitoring” the impact on low- income residents, Tsang said. Hong Kong, which pegs its currency to the US dollar, imports most of its fresh food from China. Hong Kong policy makers have said the US Federal Reserve’s plan to buy USD600 billion of Treasury securities will contribute to an asset bubble risk in the city because of excess liquidity. (Bloomberg)

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