Why the Hong Kong Peg Can't Stay in Current Form

The Hong Kong dollar is the solution to China's currency problem. Over the last few weeks the territory's monetary authority has had to intervene in markets to stop the currency from rising against the U.S. dollar. Some HK$14.3 billion ($1.85 billion) has been spent to preserve the peg. In these times of economic uncertainty, the need for an investable hard currency is so intense that even our little Hong Kong dollar is seen by some as a safe haven.