Hong Kong’s peg to the US dollar doesn’t always make sense to the people it affects most and never more so than today, when Hongkongers are faced with sky-rocketing property prices and a currency that is fast losing value against all of its neighbours.
In a way, the city is caught between China and America. To maintain the peg, Hong Kong has no choice but to import America’s 0% interest rates, which has made it extremely attractive for mainlanders to borrow money in Hong Kong to buy property -- loans in Hong Kong dollars are only going to shrink as China’s currency is allowed to rise against the US dollar.
But the effect...
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