Standard Chartered Plc’s chief executive officer said capital inflows into Hong Kong and China means the Hong Kong dollar peg is “extremely well supported.”
(Bloomberg) — Standard Chartered Plc’s chief executive officer said capital inflows into Hong Kong and China means the Hong Kong dollar peg is “extremely well supported.”
“Money has flooded into Hong Kong to reengage with the Hong Kong and Chinese equity markets,” Bill Winters said on an earnings call Thursday. “We see no risk to the peg. We see no inclination to adjust the peg or to allow any variation around the peg.”
Winters comments come the same week as Hong Kong’s de facto central bank bought local dollars to defend its peg to the greenback for the first time since November.
Read More: Hong Kong Intervenes in FX Market for First Time Since November
The bank’s Asia chief executive officer also said that the lender has reduced its total exposure to Chinese commercial real estate to $3.3 billion last year from $4 billion in 2021. The bank missed earnings estimates on Thursday after it took a credit impairment charge of $344 million, in part due to exposure to China real estate.
Policy makers have introduced liquidity relaxation measures, which have helped a lot of Chinese real estate developers, Benjamin Hung said at briefing in Hong Kong. “We are reaching the kind of trough point of the commercial real estate sector.”
While there is still uncertainty in the sector, Hung doesn’t see a “repeat in magnitude” of the provisioning that the bank saw last year.
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–With assistance from Wenjin Lv.
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