Yu Weiwen: There are still many variables in the trend of the Hong Kong dollar exchange rate and interest rates. The current low interest rate environment may not necessarily continue.

The Chief Executive of the Hong Kong Monetary Authority, Eddie Yue, wrote that the short-term liquidity in the Hong Kong dollar has become very abundant, leading to a significant decrease in interbank short-term interest rates. He emphasized that the interest rate changes basically reflect normal market behavior and reactions under the linked exchange rate system. From a macroeconomic perspective, lower interest rates are beneficial for the overall economic environment in Hong Kong at present. However, there are still many variables in the future trends of the Hong Kong dollar and interest rates. The widening gap between Hong Kong and US interest rates has increased the incentive for buying US dollars to hedge risks, leading to a softening of the Hong Kong dollar from the 7.75 level against the US dollar in early May to the recent 7.82 level. Yue Weiwen stated that if funds continue to exceed demand, the market forces of hedging transactions will weaken the Hong Kong dollar, and interbank interest rates will rise again, possibly returning to levels close to US dollar interest rates. However, the duration of the process, the speed and intensity of market forces, all have a high degree of uncertainty.