Recently, the Federal Reserve's "divine operation" has made central banks of all countries "shiver".
On April 18, a number of Fed executives spoke intensively, releasing heavy signals, even.
Fed Chair Williams warned:
"If the data shows that the Fed needs to raise interest rates to achieve its goals, then. ”
Source: Internet
"In March, U.S. non-farm payrolls rose by 303,000, well above market expectations of around 200,000. ”
For a time, almost everyone felt that they had been tricked by the United States.
"Didn't you say that there would be three interest rate cuts this year?"
"What about the interest rate cut in June, what's the situation now..."
This undoubtedly poses a dilemma for the world's major central banks: "What should we do? Should we cut interest rates, or stay as they are, or..."
In fact, it is understandable that central banks of various countries have such troubles!
Since the end of March 22 last year, the United States has raised interest rates all the way,...
When the Fed first began to raise interest rates, the central banks of many countries were still in a "wait-and-see mode".
Source: Ming Pao
But no one expected that the United States would be so horizontal and launched a one-and-a-half-long interest rate hike cycle, which made most countries' central banks break their defenses!
If it is not added, the market will exchange the national currency for the US dollar with a higher interest rate, so as to obtain a higher interest return, which will cause etc.
It is important to know that if the dollar exchange rate rises by 10%, the negative impact on the economy of emerging countries will last for more than two years in a year.
There is no way, central banks in order to defend their currencies,!
01
The Asian currency war has begun!
When the time comes to 2024, the central banks of various countries have also held on for a long time, and just when they can't hold it anymore, the news that the United States announced that "there will be 3 interest rate cuts this year" is undoubtedly "", and everyone is also thinking about following the United States to cut interest rates!
However, this wave of divine manipulation by the United States to delay the time of interest rate cuts has once again made central banks miserable!
There is no preparation for interest rate cuts, and the difficulty of economic recovery is further increased!
Source: Internet
Central banks around the world are distressed: "Let's raise interest rates with the dollar, I'm afraid the economy can't stand it, but if we don't raise interest rates, I'm afraid of currency depreciation and inflation." ”
However, the current situation may not give them much time to think, because many of them are already "unable to hold on".
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Whether it is the yen, the Indian rupee, the South Korean won and other major Asian economic currencies, or the Indonesian rupiah, Vietnamese dong, Philippine peso and other small currencies of ASEAN countries, they have encountered a new round of selling pressure.
Some currencies have hit!
In the face of the menacing wave of depreciation, central banks have acted urgently.
On April 17, Japanese and South Korean officials simultaneously verbally intervened in the foreign exchange market, selling high-yield securities and buying the rupiah to curb the decline of the local currency...
Source: Phoenix.com
Therefore, a new round of currency war has begun!
Then there is only the test:.
Before the last mile of the United States to de-inflation is completed, Asian countries can only """.
And as the financial center of Asia,.
Originally, the Hong Kong stock market fell, the property market plummeted, the economy declined, and inflation was not high, but it could only "go the other way" and fall with it...
This is also the helplessness of the Hong Kong government!
02
Hong Kong Government: Do the opposite
In the "triple paradox" proposed by the American economist Paul Krugman, under the conditions of an open economy, the independence of monetary policy, the stability of the exchange rate, and the complete liquidity of capital cannot be achieved at the same time.
Source: Internet
As a highly export-oriented and open economy with free capital inflow and outflow, Hong Kong has no choice but to choose the linked exchange rate to ensure exchange rate stability.
The Fed raises interest rates frequently, and in general,!
This is because once the interest rate of the US dollar is higher than that of the Hong Kong dollar, it will induce a carry trade in the market, that is, lending the Hong Kong dollar at a lower interest rate and then exchanging it for the US dollar with a higher interest rate to earn the interest rate differential.
To this end, the Hong Kong Monetary Authority (HKMA) has adopted an automatic interest rate adjustment mechanism (APRE) and has been committed to fulfilling its Convertibility Undertaking commitments.
Source: Hong Kong Monetary Authority
Two scenarios
Scenario 1: Fund inflow into Hong Kong dollars: If the market demand for the Hong Kong dollar outstrips the supply, and the market exchange rate strengthens to the strong side Convertibility Undertaking rate of HK$7.75 to US$1, the HKMA stands ready to provide banks with an increase in the Aggregate Balance (a component of the Monetary Base) and a decrease in the Hong Kong dollar interest rate, thereby bringing the Hong Kong dollar exchange rate back to the conversion range of 7.75 to 7.85 from the strong side Convertibility Undertaking level.
Scenario 2: Outflow of funds from Hong Kong dollars: If there is an oversupply of the Hong Kong dollar, the market exchange rate weakens to the weak-side Convertibility Undertaking rate of HK$7.85 to US$1, which reduces the Aggregate Balance (a component of the Monetary Base) and the exchange rate of the Hong Kong dollar will then return from the weak-side Convertibility Undertaking level to the conversion range.
Source: Dagong.com
To put it simply: the Hong Kong Monetary Authority (HKMA) will sell US dollars and buy Hong Kong dollars to ensure that the exchange rate does not continue to rise (i.e. ).
However, every time the Hong Kong Monetary Authority buys Hong Kong dollars, it means that an equal amount of funds flows out of the Hong Kong dollar system, which is reflected in.
As of February this year, the Aggregate Balance was only about HK$45 billion, which has also raised concerns among many:
Hong Kong, is the linked exchange rate also going to collapse?
03
Hong Kong: I'm still very steady!
Here, you need to understand the relevant concepts:
It is the banks that facilitate the HKMA's response to the exchange rate, and an account set up by the HKMA, when the exchange rate needs to be pulled, the HKMA acquires the Hong Kong dollars in the account, so the balance becomes smaller, and that's it.
In addition, Hong Kong has also maintained a stable exchange rate!
Source: TVB
"On April 9, the Hong Kong Monetary Authority announced that Hong Kong's official foreign exchange reserve assets at the end of March 2024 were US$423.6 billion (US$425.2 billion at the end of February 2024)!
US$423.6 billion of total foreign exchange reserve assets, or about 40% of Hong Kong dollar M3!"
At present, Hong Kong's foreign exchange reserves are still the capital adequacy ratio of the banking system of about 20%, which provides a strong and solid buffer and shock resistance for Hong Kong's financial market.
Therefore, Hong Kong's financial system is still very stable!
The U.S. rate hikes, the Hong Kong dollar follows, for Hong Kong,.
Lending rates will rise, to some extent. (The high cost of borrowing reduces the desire to invest for both buyers and property developers.) ）
Source: HK01
The rise in deposit rates has made Hong Kong prosperous.
At 7 o'clock in the morning, there are already long queues at the entrance of many Hong Kong banks, and some appointments are even queued up to a month later.
After all, a 5% interest rate is not a low one!