I know countries can still buy USD on open forex market. But has US ever officially de-coupled USD with another country?
Washington’s decision to strip the territory of its special trading privileges, in retaliation for China’s controversial new security law, has raised fears in some quarters that Hong Kong’s currency peg with the dollar could be abandoned.
That would, according to UK foreign secretary Dominic Raab on Tuesday, threaten “what has long been the jewel in [China’s] economic crown”.
I skip some paras.
Hong Kong’s dollar was pegged to its US counterpart in 1983 to stop the currency’s free fall as London and Beijing thrashed out the then British colony’s return to China.
The risk for the peg is that the US would limit Hong Kong banks from accessing greenbacks, severing links, and triggering chaos.