Pressure on the Hong Kong Dollar Peg Keeps Building
The social and economic costs of maintaining the currency’s link to the greenback may be getting too great to continue bearing.
Richard Cookson Bloomberg 23 november 2022
Don’t Bet Against the Hong Kong Dollar
Unlike a central bank, a currency board lacks the capacity to engage in discretionary monetary policy. Its sole purpose is to maintain a fixed exchange rate between its own currency and its foreign-currency anchor.
It does so in an automatic, credible way because its currency is fully backed by anchor-currency reserves. The money created by a currency board is simply a clone.
That is why no modern currency board’s fixed exchange rate has ever been broken—and currency boards have been a graveyard for speculators.
John Greenwood and Steve H. Hanke
WSJ 1 December 2022
https://www.wsj.com/articles/dont-bet-against-the-hong-kong-dollar-11669938532
Kommentarer