- Despite speculation, Hong Kong is unlikely to abandon its dollar peg any time soon.
- The city's monetary policymakers allow the currency to trade in a narrow range of 7.75 to 7.85 to the US dollar.
- Hong Kong's low cost of borrowing is due to too much money going around.
- The dollar peg removes exchange rate risk for foreign depositors and draws in global funds.
- Foreign investors looking to profit from China's reopening have also contributed to inflows in Hong Kong.
Sorry, Short Sellers, Hong Kong’s Dollar Is Stronger Than It Looks
Investors such as Bill Ackman and Boaz Weinstein have bet against the city’s currency, but monetary authorities are likely to keep it tied to the US dollar.
Shuli Ren
