Advisors to President Donald Trump were reportedly considering proposals to strike against the Hong Kong dollar peg, in response to China implementing a national security law on the city.
China has the world's largest foreign exchange reserves — at around $3 trillion, according to Reuters.
"Hong Kong and China's central government are prepared for this," ANZ's Yeung wrote, referring to the possibility of the U.S. undermining the peg. "Hong Kong's Financial Secretary Paul Chan has stated that even if the US takes measures to make Hong Kong dollar settlement inconvenient, the government has a contingency plan," he added,Analysts point out that banning Hong Kong from buying up U.S.
"To isolate Hong Kong from Wall Street and the dollar system could severely impair the HKD peg and Hong Kong's global financial center status, resulting in capital exodus," they said. DBS analysts said: "Given Hong Kong's importance as the third largest forex centre and its status as an international financial centre closely integrated with the global economy and financial system, it is improbable that the US would deny Hong Kong access to the USD clearing system."Demand for the Hong Kong dollar has surged this year, despite fears the peg could be threatened on the back of those U.S.-China tensions.
Malaysia Latest News, Malaysia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Trump threat to remove Hong Kong dollar peg impossible, analyst says - Business InsiderBusiness Insider is a fast-growing business site with deep financial, media, tech, and other industry verticals. Launched in 2007, the site is now the largest business news site on the web.
Read more »
PHOTOS: How Hong Kong Reopened Schools — And Why It Closed Them AgainHong Kong schools reopened in May, after being closed since January. Things looked promising. But now a spike in infections in the city has again led to their closure.
Read more »
U.S. weighs limited options to deal with China over Hong Kong: WSJThe United States is weighing restricted options to deal with China over its recent moves in Hong Kong, the Wall Street Journal reported on Sunday, as tensions between Washington and Beijing heat up.
Read more »
Property developers rush to attract Hong Kong residents amid uncertainty over new lawAmid economic recession and uncertainty over China's National Security Law, global real estate firms are trying to get Hong Kong residents to buy abroad.
Read more »
The new Hong Kong: Disappearing books, illegal words and arrests over blank white paperLess than two weeks under a new national security law enacted by Beijing, Hong Kong residents already feel a curtain of control falling over the city's realms of speech and thought.
Read more »