【明報專訊】THE US Federal Reserve has raised the interest rate by 0.25%. As the spread between the Hong Kong dollar and the US dollar keeps widening and the Hong Kong dollar continues to weaken, it is only a matter of time before the 7.85 weak-side convertibility undertaking level is reached. Over the last two-odd years, Hong Kong has kept putting off following in the US's footsteps by raising rates. One of the main reasons has been the overflow of hot money. However, if the exchange rate of the Hong Kong dollar reaches the weak-side convertibility undertaking level ultimately, the Hong Kong Monetary Authority will be able to activate the mechanism to buy Hong Kong dollars and sell US dollars, thereby stamping out some hot money. It will be an important step towards the normalisation of Hong Kong's interest rates. However, whether such a neat calculation will work out as expected depends on the scale and speed of the capital outflow. Given the fact that the upward momentum of the mainland and Hong Kong economies remains strong and that assets denominated in Hong Kong dollars remain attractive, a drastic capital flight might not happen. However, if a full-blown trade war breaks out between China and the United States, the situation might reverse instantly. In the next six months, there will be a lot of uncertainties in Hong Kong's property market and stock market. Since the market may become more volatile, Hong Kong needs to do a good job in risk management.