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Hong Kong Is Blowing Billions To Defend The Dollar Peg... And It's Not Working
Overnight trading in HKD offered a brief moment of hope for the Monetary Authority as the dollar popped off its peg band's lower limit after comments from the former HKMA chief Joseph Yam renounced the current HKMA chief's comments and suggested rate-hikes (to counter the endless flow from the LIBOR-HIBOR carry trade) was room for Hong Kong to adjust interest rates and additional exchange fund bill sales can be an option. However, that did not last, as the flows just kept coming and HKD was back at the 7.85 to the USD level very quickly. The Hong Kong Monetary Authority has bought over HKD28.6 billion (USD3.6 ... (full story)