ANZ Asks If Hong Kong's Central Bank Is Ready for Quicker U.S. Fed Tapering
ANZ Bank noted that for the first time since December 2019 the Hong Kong dollar (HKD) spot was approaching 7.80, the midpoint of the band.
The Hong Kong Monetary Authority (HKMA) would increase the issuing of its Exchange Fund Bills again as the United States Federal Reserve mulled a larger scale of tapering, wrote the bank in a note to clients.
As the Aggregate Balance continued to drop, the liquidity in the banking system will be tightened, according to ANZ.
Equities market activities will likely become "vibrant" in 2022, added the bank. As a result, increasing demand for HKD could offset the impact of Fed tapering next year.