Caixin
May 12, 2022 08:32 PM
ECONOMY

Hong Kong Dollar Defense to Drain Billions as Economy Sputters

The Hong Kong Monetary Authority is expected to spend at least $16 billion defending the city’s currency peg as the dollar surges on U.S. rate hikes. Photo: Bloomberg
The Hong Kong Monetary Authority is expected to spend at least $16 billion defending the city’s currency peg as the dollar surges on U.S. rate hikes. Photo: Bloomberg

(Bloomberg) — Hong Kong’s beleaguered economy faces the prospect of soaring borrowing costs, with the city’s de facto central bank expected to drain large amounts of liquidity as it defends a dollar peg.

Three-month money market rates may jump as much as 190 basis points by the end of the year, according to a survey of five analysts. The Hong Kong Monetary Authority (HKMA) is seen spending at least $16 billion defending the city’s currency peg as the dollar surges on U.S. rate hikes.

You've accessed an article available only to subscribers
VIEW OPTIONS
Share this article
Open WeChat and scan the QR code