HKD peg unlikely to change – ING
Iris Pang, economist at ING, suggests that they don't think the HKD peg will change as due to the prolonged protests, investors have started to worry about Hong Kong's dollar peg.
Key Quotes
“The HKD is governed by a linked exchange rate system, which is written into the Basic Law of the Hong Kong Special Administrative Region. What can be changed is the linked currency, which is now the US dollar, and the range of the linked exchange rate level.”
“The HKD is freely traded internationally, which is important for China to do businesses with the rest of the world.”
“We expect the Hong Kong Monetary Authority (HKMA) to stick to the existing linked exchange rate system, now more than ever.”
“We expect the HKD to fall from the current 7.84 level to 7.82 by end of 2019 as we expect some mega sized IPOs to be listed in Hong Kong SAR in the second half of the year.”
“For the same reason, we expect the three-month HIBOR to increase from 2.35 to 2.55 by end of 2019.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
