HKMA Sold HKD the 13th Time, around HK $100 billion Spent Totally

It is reported on June 22, the Hong Kong dollar (HKD) to USD exchange rate continued to be weak at a exchange level of 7.85. According to the linked exchange rate system, the Hong Kong Monetary Authority (HKMA) sold HK$11.249 billion. Recently, the HKD to USD exchange rate continued to weaken, and this week, HKMA has continuously sold HKD during the trading hours of the Hong Kong stock market and the United States stock market. Although the US stock market was closed on Monday, the HKMA still sold HKD. Hong Kong’s banking system balance will fall to HK$241.78 billion after June 24.

US inflation continued to increase in May, hitting a 40-year high. In response to this, on June 16, Federal Reserve Chairman Jerome Powell announced the most significant rate hike by the Fed since 1994, a 75 basis points increase. Subsequently, as the worsening inflation in the US continued, Powell expressed that the Fed is “strongly committed” to restoring the inflation rate to 2%. Powell stressed that he thought tighter monetary policy would be an effective tool to fight inflation.Now, according to official announcement of Hong Kong Government, the foreign exchange reserves at the end of April were US$465.7 billion. But this US$465.7 billion is not cash, many of which are USD-nominated assets. According to Miles Guo’s intelligence, this part has long been embezzled by the Chinese Communist Party (CCP), which will not be revealed to the public. With the Fed’s move to raise interest rates and shrink its balance sheet, HKMA must also raise HKD’s interest rates. Otherwise, HKD exchange rate will collapse and depreciate if the interest rate increases drastically. The interest rate hike of the HKD will undoubtedly cause a fatal blow to the problematic Hong Kong stock market and property market. For the HKD, it will be a terrible financial disaster.