The foreign currency assets of HK, including those held in the Land Fund, were US$ 98.1 billion at the end of January 1998. According to Professor Milton Friedman, "a small country is better off linking its own currency to that of a major country, particularly one with which it has close economic relationship, which is a major trading partner". ... PROS Cushion an economy against shocks The link has proved its resilience against waves of shocks: 1987 stock market shock, the June 4 crackdown in 1989, 1990 Gulf War, the collapse of BCCI in 1992, Mexican currency crisis and the most severe one...

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