Assessing Pressures on Hong Kong's Linked Exchange Rate System

Category: Policy Discussion

Published: 2026-03-01

An examination of the Exchange Fund's first withdrawal in forty years, 2025 intervention dynamics, and whether incremental flexibility in the convertibility zone could reduce domestic interest-rate volatility.

Read the full Icarus Asia research note at https://icarusasia.com/research/hkd-peg-assessment.

Related research

  • Japan's Savings Start to Stay Home — The Bank of Japan's September rate increase looked dovish on announcement, but its slower effects may redirect Japanese savings, lift global term premia and reshape yen-funded risk taking.
  • Above Five, Then Back Below — The 10-year Treasury touched its highest yield since 2007, reaching an intraday 5.014% before retreating. Buyers showed up again. A term premium near 0.9 percentage point means the next test will be harder to pass.
  • The Number Behind the Number — India's 7.8 percent Q1 FY2026–27 GDP print survives arithmetic reconstruction. What it rests on is a set of price assumptions that published data cannot verify, leaving a plausible sensitivity range of roughly 6.4 to 7.9 percent.

By Icarus Asia — independent strategic advisory and market research on Asian markets.