Just a few days ago, I noticed the Hong Kong dollar making it to the currencies being monitored on the Bloomberg TV Asia data screen. I understand that the Hong Kong Monetary Authority has widened the band in which the currency can move around a nominal peg of HKD7.80 to one USD. Still, this band of HKD7.75 to HKD7.85 is negligibly small, amounting to less than ±1%. Few people would bother to notice such minuscule movements, I believe.
Still, Bloomberg might know something that I don't. The ungenerous range was conceived as a way to partially control speculators using HKD as a substitute for the Chinese yuan in hopes that the latter would revalue. Are the Bloomberg folks prepping us for the near-term prospect of yuan revaluation? I can only, ahem, speculate.
Posted by Emmanuel |