Continuing to Defend Currency Peg to US Dollar May Be ‘Dangerous’ for Hong Kong: Expert

Yuan’s depreciation against US dollar impacts Chinese economy

Hong Kong's economic cycle increasingly resembles that of mainland China, but its financial sector continues to follow the pace of the Fed’s interest rate hikes, placing it in a challenging position. AFP

Hong Kong’s latest foreign currency reserve showed another $10.014 billion drop in August, down from July’s $441.8 billion, pushing the accumulated reduction since last December to $67.563 billion.

On Sept. 30, the Hong Kong Monetary Authority (HKMA), the city’s central bank, released an analysis of the city’s foreign currency reserves and foreign currency liquidity. The data showed the city’s foreign currency reserves had shrunk to $431.821 billion at the end of August, from $499.384 billion at the end of November 2021.