Hong Kong will be ready to impose fees on some bank deposits by early March to counter speculation on the local currency, the head of the British colony's bank association said. "We have . . . a draft agreement which will be applied if necessary," said John Mackenzie after a special meeting of the association last week.
A bank association spokesman said negative interest rates--imposed by levying fees on large accounts--were aimed at countering speculation that the local dollar would be revalued.
Speculative funds have poured into the colony on expectations that the peg of 7.8 Hong Kong dollars to one U.S. dollar would be adjusted.
Washington has been pressing Hong Kong to revalue, a move that would make the colony's exports less competitive and help reduce the huge U.S. trade deficit. Hong Kong's government has adamantly refused, saying the peg is needed to maintain political confidence ahead of the colony's return to Chinese rule in 1997.