U.S. dollar grows stronger in Hong Kong amid banking crisis
Hong Kong’s savers are apparently abandoning the renminbi for the still mighty but battered U.S. dollar.
They’re buying more U.S. dollars and Hong Kong dollars that’s boosting liquidity and less of the renminbi because of lingering doubts about the latter’s appreciation. This means that Hong Kong banks now have more money to lend. A majority of borrowers also prefer the lower rates offered by the U.S. dollar.
The increasing liquidity has somewhat lessened fears of a credit crunch in Hong Kong that intensified last year as European banks began trimming their balance sheets in Asia.
At the end of November, Chinese currency deposits in Hong Kong amounted to 10.2% of total deposits in the city, according to the Hong Kong Monetary Authority.
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Tags: U.S. dollar, Hong Kong dollar, Hong Kong Monetary Authority
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