27 August 2019 FT — Articles to Read

27 August 2019


Question: According to MSN: Money, what is America’s No. 1 college major for salary and job availability?


Ukrainians abroad pile into property back home – Pg. 4

  • Ukraine is Europe’s biggest recipient of remittances in proportion to the size of its economy
  • More than 11% of Ukraine’s GDP comes from remittances and its 5m-strong workforce abroad las year sent home a record $14.4bn through wire transfers and cash carried across the border
  • A widespread distrust of local banks means that workers abroad are pouring their cash into other assets, particularly property


Hong Kong peg holds firm in face of speculators and protestors – Pg. 18

  • …36-year old exchange rate peg shows few signs of breaking down
  • The peg was introduced in 1983 to stop runaway depreciation of the then free-floating currency, which was sparked by negotiations between the UK and China over Hong Kong’s future. Bar some tweaks in the 2000s, the system is mostly unchanged since then
  • The currency board is run by the Hong Kong Monetary Authority, which acts as a de factor central bank but does not engage in monetary policy like the Bank of England or US Federal Reserve
  • Instead, the HKMA has a mandate to buy up Hong Kong dollars for US dollars when outflows push the exchange rate to the trading band’s weaker limit. This leaves banks with fewer funds for short-term lending and eventually drives up interest rates enough to make Hong Kong dollar assets more attractive than their US dollar counterparts, encouraging inflows that strengthen the exchange rate.  The reverse is done when the currency gets too strong
  • ..further down the line, the peg could come under grater pressure as the 2047 deadline approaches for the end “one country, two systems”, which preserves Hong Kong’s civil freedoms and independent legal infrastructure for 50 years after the handover from Britain in 1997


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