Life of Guangzhou - Hong Kong Central Bank Chief to Quit in 2009

Joseph Yam, head of Hong Kong's de facto central bank, will step down in 2009, a senior government official on Sunday said.

Mr Yam became the first chief executive of the Hong Kong Monetary Authority in 1993, a post that carries no retirement age or defined tenure. However, he will be 60 next year, the age at which government officials usually retire.

Mr Yam is the public face of Hong Kong's currency peg to the US dollar. News of his departure comes as the Hong Kong dollar is testing the upper end of its trading range against the US dollar.

Last week, the HKMA bought $200m as the Hong Kong dollar - demand for which has been soaring in tandem with the local stock market - approached 7.75 to the US dollar.

Under the terms of the HKMA's so-called "convertibility undertaking", the authority is committed to buying US dollars from licensed banks at 7.75 and selling them at 7.85. In return for the currency stability the peg provides, Hong Kong has, in effect, surrendered interest rate decision-making powers to the US Federal Reserve.

A career civil servant, Mr Yam was involved in the establishment of the city's currency board in 1983. He first entered government in 1971 and rose to become director of Hong Kong's exchange fund in 1991.

There has been much speculation that Mr Yam will be succeeded by Norman Chan, his former deputy, who quit the position in 2005 and is close to Donald Tsang, Hong Kong's chief executive.

Mr Chan, who is now vice-chairman of Standard Chartered's Asia operations, managed Mr Tsang's first campaign for Hong Kong's top political office. (By Robin Kwong and Tom Mitchell)