The peg between the two currencies had lasted for 38 years.

On a radio program, Yam said it was hard to predict the future of the Sino-US relationship. He said that it was "highly unlikely" for the US to weigh restrictions on capitals and control the foreign exchange given that China is the US's biggest creditor.

The former chief of Hong Kong’s de facto central bank also said there was an improvement in the US' attitude towards Hong Kong in the Biden-era and expressed confidence the country will not deploy “nuclear” financial weapons on the city.

Yam believed that the US sanction deployed after the introduction of the national security law would not affect Hong Kong's status as a global financial hub. He said the current sanctions only affected the individuals listed, but not the institutes or the government.

However, the economist said Hong Kong still needed a backup plan, adding that the Hong Kong dollars can tie to other currencies if needed but he did not mean to break the tie with the US dollar.

Meanwhile, Yam also suggested that Hong Kong can play a role in internationalizing the Renminbi — the currency used in mainland China, by using the Chinese yuan in capital markets.