Kim Yong-sam's monetary policy and financial institution adjustment policies announced this time are actually an attempt to evade international financing risks.
The depreciation of the H country's currency brought about drastic changes in the political and economic landscape. After being identified, financial institutions went bankrupt one after another, while others faced mergers or dissolution.
At this time, Chen Dong still held nearly 70,000 short positions and had not closed them.
Lin Zhiyuan worriedly reminded him: "The fact that H country has joined forces with the International Monetary Fund means that H country's economy is about to usher in a new wave of strong recovery, and we will not be able to gain any advantage in this financial market."
"Even if we start closing out the 70,000 short positions now, it will take time."
He tentatively suggested, "Why don't we sell it now? We don't aim for the highest profit, just the most stable one."
Chen Dong was quite dissatisfied with Lin Zhiyuan's cautious investment style.
"Fortune favors the bold. According to our analysts' model of the H country's financial market, the Korean won still has room to fall. Exiting now would not be a wise move."
Chen Dong explained his reasoning, "Besides, do you really think that just because the International Monetary Fund is backing H country, it can save H country's already crumbling financial market?"
Chen Dong asked a probing question that left Lin Zhiyuan speechless.
Generally speaking, the International Monetary Fund holds a large amount of overseas foreign exchange. The most direct reason for H country's failure to protect its market this time is that the Hong Kong Monetary Authority and H country's asset management company are facing a foreign exchange shortage.
In the foreign exchange market of Country H, a large number of sell orders appeared, but the Monetary Authority of Singapore and asset management companies were helpless and could only watch as the sell orders accumulated more and more in the currency market.
Retail investors, who are outside the core of the market turmoil and change, are unable to judge whether the Korean won is on the verge of collapse due to the huge information gap.
However, the large number of sell orders piling up in the Korean won market, with no buyers to take them, is direct evidence of this.
The more sell orders there are, the less optimistic the overall stock market investors are about the future of the Korean won.
The market held a pessimistic view of the appreciation of the Korean won, which led to a large number of stock investors following suit and selling off their Korean won.
Once this herd-driven sell-off reached a certain scale, even the H country conglomerate, which was at the center of the information, knew that the devaluation of the Korean won was due to an attack by overseas speculative capital.
However, regardless of the reason for the devaluation, once devaluation occurs, their assets will face the risk of shrinking, so they must sell their assets as soon as possible.
The two groups' identical currency selling activities resulted in a large-scale cash flow in H country's financial market.
The increase in the amount of currency in circulation has directly caused a certain degree of inflation.
Inflation has significantly reduced the ability of the Hong Kong Monetary Authority and asset management companies to intervene in the market.
Under these circumstances, the interim minister of finance had no choice but to apply to his superiors to increase the money supply.
By using surplus currency to buy and absorb the sell orders for Korean won in the currency market, this exchange of money can maximize the depreciation of the Korean won.
However, what Kim Hee-cheol didn't expect was that finance and the stock market are not like plastic surgery; you can't just put threads in a certain place and pull up the skin in that area.
The Hong Kong Monetary Authority (HKMA) and asset management companies have adopted rather conservative measures to maintain the freedom of the financial market, and their role has been quite limited.
A large-scale increase in the money supply will inevitably bring huge side effects.
November 21st.
The letter of appointment, signed by the No. 1 of Country H, was officially handed to Kim Hee-cheol.
On the same day, the government of Country H accepted economic aid from the International Monetary Fund and signed a rather stringent set of restrictions.
When Chen Dong received this news, he immediately instructed his traders to buy short positions.
"yes."
Finally, a new operation was launched, and all the traders in the trading hall were ready to go, with the sound of keyboards clattering throughout the hall.
Chen Dong instructed Afang, "Have the four major families stabilize the situation first, and don't back down."
"The Korean won still has room to fall, and even if the International Monetary Fund comes, it won't make a difference."
“Yes…” Afang said hesitantly.
Although she didn't understand why her boss was doing things this way, she still obediently followed his instructions.
After receiving Afang's call, Guo Bingxiang confirmed with her several times:
"Are you sure Chen Dong told you not to stop, and not to stop immediately?"
Afang repeated her boss's exact words, and Guo Bingxiang remained silent on the other end of the phone.
"Has your boss lost his mind? The International Monetary Fund has already finalized its aid policy for H country's financial market. In less than a month, H country's currency exchange rate will rise, and the composite index will also increase accordingly."
"Isn't buying a large short order now just asking to be ripped off?"
Afang herself couldn't explain it either. "I've already relayed the boss's original words. Whether to take action or back off is up to Boss Guo to decide."
"You!" This was the first time Guo Bingxiang had been rebuffed. He said very unfriendly, "How dare you talk to me like that? What kind of attitude is this?"
"What's your name? I'm going to complain about you to Chen Dong."
Afang paused for a moment, then said sincerely, "My name is Afang, and I am Chen Dong's new secretary."
"I'll remember you." Guo Bingxiang clearly hadn't expected Afang to be so defiant.
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