The Hong Kong industry suggests researching the reform of the Hong Kong dollar peg: expand the exchange rate fluctuation range and establish a "basket of currencies" anchoring mechanism.

The Hong Kong government is currently conducting public consultations on the "2026 Policy Address." The Hong Kong Securities and Futures Professionals Association (HKSFPA) has proposed policy suggestions, calling on the authorities to adapt to the global trend of "de-dollarization" by including the "reform of the Hong Kong dollar peg" in long-term policy research. They also recommend establishing an expert committee to study the moderate expansion of the Hong Kong dollar's fluctuation range from 7.75 to 7.85, and gradually setting up a "basket of currencies" anchoring mechanism that includes the renminbi, the euro, and gold. The HKSFPA points out that the Hong Kong dollar peg, implemented since 1983, has served as a cornerstone for financial stability for over 40 years, but its operational premise is based on the notion that "the US dollar is the only core reserve currency globally." With the US federal government debt surpassing $39 trillion and annual interest payments exceeding $1 trillion, coupled with global central banks continuously reducing their holdings of US Treasury bonds and turning towards gold and local currency settlements, the US dollar is in a state of "slow decline." The HKSFPA believes that fully pegging the Hong Kong dollar to the US dollar effectively cedes Hong Kong's monetary policy decision-making power to the US Federal Reserve. Over the past two years, despite retail weaknesses and pressures on small and medium-sized enterprises, Hong Kong has been forced to follow the Federal Reserve's rapid interest rate hikes, directly increasing the mortgage burden on citizens. Conversely, when the Federal Reserve implemented quantitative easing, hot money surged in, easily inflating the property market bubble. This "passive monetary policy" has clearly undermined Hong Kong's economic autonomy; if the old system is upheld, any credit crisis with the US dollar will leave Hong Kong's financial market, real estate sector, and citizens' assets with little buffer space. To address long-term monetary risks, the HKSFPA has proposed four transformational paths: 1. Establish an "Expert Committee on Hong Kong Dollar Monetary System Reform." Led by the Hong Kong Monetary Authority (HKMA) and the Financial Services and the Treasury Bureau, this committee will bring together monetary economists, legal experts, and market practitioners with the aim of submitting a mid-term report by 2027. Research directions include: - Expanding the exchange rate range: moderately increase the current peg range from 7.75 to 7.85, enhancing exchange rate flexibility. - Introducing a basket of currencies: establish a reference mechanism to gradually incorporate assets like the renminbi, euro, and gold to reduce singular reliance on the US dollar. - Preventing speculative shocks: design an orderly transition plan to maintain market confidence and financial stability. 2. Accelerate the development of renminbi-denominated financial products. Encourage more stocks, bonds, and derivatives to be denominated and settled in renminbi, deepen the offshore renminbi liquidity pool, and discuss with mainland regulatory bodies the relaxation of restrictions on two-way capital flows to pave the way for a deeper linkage between the Hong Kong dollar and the renminbi. 3. Diversify the management of foreign exchange reserves. Gradually increase holdings of gold, other major currencies, and high-quality sovereign bonds on top of existing dollar assets, regularly disclose reserve composition and risk assessment to the public, thereby reducing single-asset risk exposure. 4. Strengthen public communication and education. It is suggested that the HKMA regularly release a "Monetary System Robustness Report," explaining the system risks and reform progress in layman's terms to the market and citizens, preventing unnecessary market panic. Additionally, the HKSFPA has proposed a series of recommendations regarding the settlement system for Hong Kong stocks, market fair competition, Islamic finance, corporate overseas financing, and digital finance. Among these, to address the survival challenges faced by local small and medium-sized brokers and foreign brokers, they urge the Hong Kong Stock Exchange to eliminate the minimum monthly fee and revert to "pay-as-you-go" billing, complemented by a prepay credit mechanism. They also call for the Competition Commission and the Securities and Futures Commission to intervene and review whether large dominant platforms are engaging in predatory pricing practices through massive capital by using "zero commissions" and "no platform fees," to prevent price monopolies and protect the survival space for local small and medium-sized brokers.