When Hong Kong interest rate is higher than US interest rate, what would happen under the currency board system? A. HKMA would delink HKD with USD B. HKMA would set a new HIBOR which is equal to US interest rate C. Notes-issuing banks would sell HKD from the market D. B & C E. None of the above

When Hong Kong interest rate is higher than US interest rate, what would happen under the currency board system? A. HKMA would delink HKD with USD B. HKMA would set a new HIBOR which is equal to US interest rate C. Notes-issuing banks would sell HKD from the market D. B & C E. None of the above

Macroeconomics: Principles and Policy (MindTap Course List)

13th Edition

ISBN:9781305280601

Author:William J. Baumol, Alan S. Blinder

Publisher:William J. Baumol, Alan S. Blinder

Chapter19: The International Monetary System: Order Or Disorder

Section: Chapter Questions

Problem 8DQ

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Question

When Hong Kong interest rate is higher than US interest rate, what would happen under
the currency board system?
A. HKMA would delink HKD with USD
B. HKMA would set a new HIBOR which is equal to US interest rate
C. Notes-issuing banks would sell HKD from the market
D. B & C
E. None of the above

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