Economics
Hong Kong Seen Spending Billions More to Defend Currency Peg
- Authorities intervene as local dollar hits weak end of band
- Aggregate balance will fall to HK$10 billion by year-end: BAML
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This round of currency intervention in Hong Kong is far from over.
That’s according to analysts, who’re watching the interplay between the amount of money in the city’s financial system and local borrowing costs. Shorting the Hong Kong dollar will remain profitable until the latter starts to go up sharply, and the monetary authority will spend at least another HK$50 billion ($6.4 billion) defending the peg before that happens, according to Bank of America Merrill Lynch and OCBC Wing Hang Bank Ltd.