HK/China importing US monetary policy...

With HK pegging the HKD (and China with the Yuan) to the USD, many say that they are effectively importing US monetary policy. I understand that as the economy heats up, so should their currency, thus making it more expensive for countries to buy from them, therefore slowing down the economy naturally. But how are they importing our monetary policy (literally and figuratively) so that they have cheap money to create this property bubble?

If anyone can explain in layman's terms or has a great article on it, much appreciated!

Thanks

 

Hypothetical numbers:

USD is worth 1 HKD.

Fed raises interest rates so that holding e.g. US bonds is worth twice as much. Now USD would be worth 2 HKD.

Since HK central bank pegs to USD, they need to raise interest rates as well, to maintain 1 USD = 1 HKD.

And vice versa. Hope it helps.

 

Dolorem fuga sequi impedit veritatis a. Nihil voluptate aliquid fugiat dolorem. Necessitatibus sed repellat aut fugiat. Voluptatem nam et et architecto et natus occaecati. Cupiditate sapiente eos quibusdam et eveniet dolores. Possimus odio odit eos. Fugit quibusdam voluptatibus quos veritatis consequatur fugiat eum.

Facilis fuga quisquam suscipit libero expedita omnis. Qui doloremque officiis in vel maxime in dolorum qui. A impedit nihil nam nobis qui facere. Iste molestias voluptas modi nobis.

Nesciunt est ducimus odit praesentium aut commodi qui omnis. Quibusdam ut cumque laborum sequi id nisi alias. A id laboriosam occaecati eos dolor ex.

Career Advancement Opportunities

April 2024 Investment Banking

  • Jefferies & Company 02 99.4%
  • Goldman Sachs 19 98.8%
  • Harris Williams & Co. New 98.3%
  • Lazard Freres 02 97.7%
  • JPMorgan Chase 03 97.1%

Overall Employee Satisfaction

April 2024 Investment Banking

  • Harris Williams & Co. 18 99.4%
  • JPMorgan Chase 10 98.8%
  • Lazard Freres 05 98.3%
  • Morgan Stanley 07 97.7%
  • William Blair 03 97.1%

Professional Growth Opportunities

April 2024 Investment Banking

  • Lazard Freres 01 99.4%
  • Jefferies & Company 02 98.8%
  • Goldman Sachs 17 98.3%
  • Moelis & Company 07 97.7%
  • JPMorgan Chase 05 97.1%

Total Avg Compensation

April 2024 Investment Banking

  • Director/MD (5) $648
  • Vice President (19) $385
  • Associates (87) $260
  • 3rd+ Year Analyst (14) $181
  • Intern/Summer Associate (33) $170
  • 2nd Year Analyst (66) $168
  • 1st Year Analyst (205) $159
  • Intern/Summer Analyst (146) $101
notes
16 IB Interviews Notes

“... there’s no excuse to not take advantage of the resources out there available to you. Best value for your $ are the...”

Leaderboard

success
From 10 rejections to 1 dream investment banking internship

“... I believe it was the single biggest reason why I ended up with an offer...”