Hong Kong dollar buoyant

When the world's most famous speculator, U.S.-based billionaire George Soros, says no one is going to get rich by attacking the Hong Kong currency, it is clear that the Special Administrative Region (SAR) has won this round in protecting its link to the U.S. dollar.

Flying to Australia, Financial Secretary Sir Donald Tsang Yam- kuen confidently declared that "the so-called crisis is more or less over".

While that is true for Hong Kong, as things now stand, East Asia's currency crisis may still have some way to go.

The Thai baht shows no sign of ending its downward plunge, a trend likely to be accelerated by bad loan figures from several banks this week.

South Korea is due to unveil a rescue package for its troubled financial sector today, focusing attention on the perilous state of several banks which have already pushed the won to a seven- year low against the U.S. dollar.

Such continuing turmoil means Hong Kong cannot afford to relax for fear the SAR will once again feel what Sir Donald has called the "contagion effect."

In addition, the SAR must now begin to wrestle with the consequences of its own success in defending the dollar peg while currencies across the region have depreciated, thus making their economies relatively more competitive.

-- South China Morning Post