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HKD/USD @ 7.85?

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  1. #21

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    Not the forex reserves .. the exchange fund is HUGE .... but I do recall that that even the exchange fund is split into two or three sub-funds - backups, investment and some other one I forget.

    Bloomberg had an article mentioning that the interbank liquidity "fund" (if thats what you'd call it) is being used. Thats why I've picked on that number.


  2. #22

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  3. #23

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    just read this. these guys have tonnes of money to play around with. Ask george soros to come try attack hkd.

    Hong Kong Monetary Authority - Norman Chan on The Linked Exchange Rate System Staying Robust with Local Interest Rates Gradually on the Rise

    shri likes this.

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  5. #25

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    The HKMA should therefore raise its own interest rates; not doing so only serves Hong Kong's property cartel
    That was a good laugh.

  6. #26

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    in an economy where the currency is not capital controlled, you can either control the FX, and hope interest rate goes where you want it to go (i.e. Singapore/HK), or you can control the interest rate, and hope FX goes where you want it to go. Andy xie is smart enough to know that if HKMA is working on the FX, the interest rates are just going to move based on market liquidity.

    And on the word 'intervene'.. or 'defend'... the actual fact is banks operating in hk will call up hkma and tell them, i have a demand to buy USD at 7.85 hkd, can you sell them to me. HKMA under the Undertaking mechanism just calmly sell the banks the USD against HKD. i wouldn't call it intervene. they don't come into the market and dump $B and $B of USD against HKD just to suppress the currency.


  7. #27

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    I suspect they're paranoid about the days when there was blood on the streets with negative equity - specially considering how many people (including Mainland high networth folks) have invested in property and have hibor / low interest rates.

    Far too much "free" money in the economy at the moment.


  8. #28

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    No clue. All we can do is speculate and rest with the assumption that the policy makers have larger data sets, more economists and PhDs than we do.


  9. #29

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    sorry, are you saying they have let interest rate fallen too low or have they let it climbed too fast ?

    most of these are not something you can trigger a button and things happen. we are unfortunately not the Fed of US of A, where the whole world revolves around them for the last 50 years. interest rate is still a function of how much money is in the system. HKMA has actually mopped up A LOT of liquidity (i.e. the exchange funds) from the market in the last few years that came in due to QE. they could have mopped up more so that interest rate would have rose and control the property price appreciation, but that is again hindsight opinions.


  10. #30

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    Have been informed by My RM to buy US$ instead of investing in securities at the moment.

    I've sold around US$350,000 and bought AUD with an average of 1.28AUD in the last few months. The current price is 1.3250 and AUD is expected to get further hammering FML