15/08/18

Hong Kong Intervenes To Defend USDollar-Peg As Yuan Crashes



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Hong Kong Intervenes To Defend USDollar-Peg As Yuan Crashes
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Back in March, the head of the Hong Kong Monetary AuthorityNorman Chan urged citizens to "stay calm on the currency weakening," as the Hong Kong Dollar plunged to its weakest in 33 years.

The Hong Kong Dollar has been in free-fall for the last year (interrupted briefly in the middle of last year) but as its drop accelerated early in the year, HKMA wrote the blog post to reassure the people that their paper-money is safe.

Since then HKMA has puked billions of USDollars to defend the Hong Kong Dollar and has intervened numerous times today, selling US dollars to support the local currency (buying HK$9.608 billion so far)...

Really 'mean' reversion...

While the dollar-carry unwind (LIBOR-HIBOR) is putting less pressure on HKD, it seems like the SHIBOR spread is hurting...

 

As Offshore Yuan plunges...

 

 


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