Citigroup-香港金管局向市场注资削减升值压力

23-Oct-07      3页

 

 

Bottom line
Today’s market intervention by Hong Kong Monetary Authority (HKMA) could
send a signal that it would uphold the HKD trading band at 7.85-7.75/USD. Recently
there has been a market view that the influx of funds and rising inflation may in the
future force the HKMA to widen the HKD trading band. In our view, inflation will
rise in coming years but not high enough to force the HKMA to adopt a stronger
currency to curb imported inflation.
Although the HKMA’s intervention can keep the HKD spot rate in the trading band,
it may not change market expectations and the HKD appreciation in the forward
market. The USD/HKD forward is likely to remain stronger than the strong-side
limit of the HKD trading band at 7.75.
The HKMA’s intervention to sell HKD will increase the supply of HKD and ease the
tight interbank liquidity. This may help contain a rebound in HIBORs if there is a
massive demand for funds to subscribe for IPO. We think the HKMA may intervene
again, if the large demand for HKD to subscribe to IPOs keeps HKD near 7.75/USD.
Another option for HKMA is to lower the discount rate (currently 6.25%) for banks
to obtain HKD funds. This will reduce the market’s need to sell USD for buying
HKD. The HKMA will then find it less necessary to sell HKD to the market.