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Tag: Linked Exchange Rate System
What if I tell you, behind the boring news headline, there is actually a wonkish story about how the Hong Kong central bank took advantage of the monetary easing by the Fed in the last 12 year and created a new set of policy options that it can now use to actively mange the inflows created by the new round Fed easing under the Great Lockdown.
HKD tends to be on the strong side (closer to HKD 7.75 per USD) when the interest rate differential is positive (HIBOR > LIBOR).
If you think the interest rate gap between Hong Kong and US is a market phenomenon, think again. HK Monetary Authority has a much bigger role than you think