The Hong Kong Monetary Authority (HKMA) is on the verge of mopping up local dollars for the first time since a trading band was introduced in May 2005, as the currency slides toward HK$7.85 per greenback.
The local currency was at HK$7.8491 against the US dollar as of 3pm in Hong Kong.
The agency’s move would tighten liquidity and raise rates in the city, ending an era of ultra-cheap money that made Hong Kong the least affordable housing market in the world and sent the stock market to a record high.
The Hong Kong dollar has been on a downtrend over the past year as ample liquidity prevented local rates from catching up with those in the US, prompting traders to borrow the local currency to buy the US dollar.
Under the currency peg, the rates have to eventually converge. That started to happen last year when the agency sold additional debt, but the effect was temporary. By shrinking the monetary base, direct purchases of the HK dollar should exert a much larger upward pressure on rates. That would be a drastic change for Hong Kong, which has never had to defend the weak end of its currency band thanks to strong inflows.
Since the global financial crisis in 2008, US$130 billion to US$140 billion of funds have entered Hong Kong, with inflows intensifying over the past few months, Hong Kong Financial Secretary Paul Chan (陳茂波) told reporters on March 5.
Caught between US easing and steady economic growth in China, Hong Kong saw interbank liquidity swell to records — in the starkest contrast, 100 times its pre-crisis levels.
In the Bank for International Settlements’ measure of the gap between economies’ credit-to-GDP ratios and their long-term trend, Hong Kong came first, indicating unusually rapid debt growth in recent years.
“Actually it’s good for Hong Kong if some hot money leaves, because then the pace of interest-rate normalization would be more ideal,” Chan said.
HKMA Chief Executive Norman Chan (陳德霖) on March 8 said that the agency would step in when the exchange rate reached HK$7.85 and that there was “no need to worry.”
He denied that the authority does not want to see a weaker exchange rate and said it had no plans to issue extra Exchange Fund Bills.
His comments sent the Hong Kong dollar down past HK$7.84 versus the greenback that day, extending its weakest level since 1984.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six