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Hong Kong Monetary Authority CEO Eddie Yue: 'Weak-side Convertibility Undertaking' May Be Reactivated
2025-07-11 /
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Author：小编
The significant interest rate differential between Hong Kong and the United States has spurred vigorous carry trades, keeping the Hong Kong dollar exchange rate hovering close to 7.85. Given the interplay of various factors, including fund supply and demand, Federal Reserve policies, US interest rate trends, and market sentiment, there is a potential risk that the Hong Kong dollar could activate the 'Weak-side Convertibility Undertaking'. As the Aggregate Balance in the banking system dwindles towards the equilibrium point of supply and demand, Hong Kong dollar interbank interest rates will gradually converge with US dollar interest rates, becoming increasingly sensitive to fluctuations in liquidity.
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