Hong Kong’s currency peg is now 40 years old. That means aches, pains and some questions about an early retirement.
The city started pegging its currency against the U.S. dollar on Oct. 17, 1983. Since then the so-called linked exchange-rate system has endured financial crises, the city’s handover to China from the U.K., public health scares—and plenty of talk that the end might be in sight.
Hedge-fund managers have repeatedly taken that bet. They include Bill Ackman, who questioned last November why China would need the currency of the semi-autonomous city to be pegged to the dollar. But those predicting the end of the peg, which is supported by huge foreign-exchange reserves, have consistently been disappointed.
