This guy started coming in to tell the world what he is playing at, i guess trying to get everyone to follow and help him break the peg.
But his assessment of the driving factor of hibor, i.e. the aggregate balance, is not really the full picture. HKMA has already drained like trillions of HKD out of the market using the exchange bill, so if HKD gets thin they might just hold back new issuances and we would have increasing aggregate balance again.
Early April there was a sudden move of overnight hibor above 3%, causing HKD to strengthen to spike to 7.83 or 7.80.. can't remember the exact number.. We were trying to figure out what can cause that... Many bankers were speculating of a drive to trigger stop losses..
Kind of suspect its this guy doing his bit to push the market down as he builds his position. Likely he is counting on a weakening break of the peg and so running a positive carry with borrowed HKD depositing USD. From what he kind of hinted.. and probably hoping hedggies around will try very hard to read his message and join forces with him...
Let's see what else can happen..
but that said Hibor has been creeping up lately. I think HKMA is also keen to see that happening, so property prices won't continue to move up.