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"Father of the Linked Exchange Rate" Prayer Lives: Hong Kong Will Tolerate High Interest Rates to Protect the Linked Exchange Rate System

2022-11-29T09:40:28.529Z

Recently, the well-known American hedge fund manager Bill Ackman (Bill Ackman) issued an article stating that as Sino-US relations become more and more alienated, he believes that the pegged exchange rate system for the Hong Kong dollar is no longer appropriate, and it is expected that the Hong Kong dollar will eventually decouple from the US dollar.



Recently, Bill Ackman, a well-known hedge fund manager in the United States, issued an article stating that as Sino-US relations become more and more distant, he believes that the pegged exchange rate system for the Hong Kong dollar is no longer appropriate, and he expects that the Hong Kong dollar will eventually decouple from the U.S. dollar, so he has shorted the Hong Kong dollar; Another U.S. fund manager, Boaz Weinstein, also revealed that he also short-sold the Hong Kong dollar.

John Greenwood, the chief economist of Invesco and known as the "Father of the Linked Exchange Rate", believed in an interview with foreign media that in the face of a new round of selling by speculators, even if Hong Kong faces extremely high borrowing interest rates, and Short-term pain to the economy will also defend the peg.

He believes that exchange rate fluctuations have a negative impact on local asset prices, import costs and the capital market. He believes that the Hong Kong Monetary Authority will tolerate the rise of Hong Kong interest rates to the level required to maintain the peg, and is unwilling to undermine the currency stability of the past 40 years.

Kerenwood believes that the Hong Kong Monetary Authority will tolerate the rise of Hong Kong interest rates to the level required to maintain the peg, and is unwilling to undermine the currency stability of the past 40 years.

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The HKMA's entry into the market has pushed up borrowing costs. The three-month interbank offered rate is currently 5.27%, the highest level since 2007. The economic environment has also weakened under the new crown epidemic. It is expected that the economic contraction this year will exceed expectations.

Prairie Woods said bluntly that the conditions for short selling in the market are now ripe, but speculators underestimated the willingness of the Monetary Authority to maintain the pegged exchange rate system, mainly because the peg between the Hong Kong dollar and the U.S. dollar is still the biggest attraction for Hong Kong to conduct business with the mainland, and the authorities do not want to give up this Role.

Prairie Woods believes that as long as Hong Kong maintains a high interest rate level, which can attract capital inflows, there will be sufficient liquidity to meet short positions.

Chen Maobo: Investors who gamble against the Hong Kong dollar will lose

Financial Secretary Chen Maobo said at the beginning of the month that Hong Kong has adopted a linked exchange rate system and has established a strong buffer and banking system to support operations, emphasizing that investors who gamble with the Hong Kong dollar will be losers, just as some American hedge fund managers have misunderstood again earlier Hong Kong dollar.

The Hong Kong Monetary Authority also pointed out that from time to time, some market participants questioned the linked exchange rate system, most of which were based on misunderstanding of the system or their own fund positions. The Hong Kong Monetary Authority will not comment, but refers to the linked exchange rate system. In this economic cycle, Hong Kong does not need and has no intention to change the linked exchange rate system despite the large amount of capital inflows and outflows.

Dah Sing’s 1-year Hong Kong dollar time deposit increased to 5.1% and half-year period 4.95%, which is the highest in Hong Kong. The US-funded fund manager predicts that the Hong Kong dollar and the US dollar will eventually be decoupled. Morgan Stanley: Maintaining the linked exchange rate is the best arrangement. The fund manager of Youmei stated that he shorted the Hong Kong dollar. Famous hedge funds: the decoupling of the pegged exchange rate is only a matter of time, holding a large number of short positions in the Hong Kong dollar

Source: hk1

All news articles on 2022-11-29

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