Apr
27
Hong Kong Dollar Drop Has Origin in Property-Lending Rumbles
By-
Currency is at its weakest against greenback since early 2016
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Interest-rate divergence between Hong Kong and U.S. widens
Where U.S. interest rates go, Hong Kong’s follow. At least that’s the theory with the territory’s pegged currency system.
It’s not always the case. There was a sharp divergence in rates in 2003, when Hong Kong’s economy was hit by the impact of the deadly SARS virus, causing a drop in lending that generated a surfeit of liquidity, driving down rates. Local dynamics are causing a gap again, though now it has nothing to do with face masks — it’s all about real-estate lending…
Hong Kong Dollar Drop Has Origin in Property-Lending Rumbles
