From your article: “If the Hong Kong Monetary Authority had allowed the peg to go, capital flight would ensue and then property prices would tumble. Then there would be massive defaults on mortgages and then the collapse of the banks and then the collapse of the economy," said Joe Zhang, a Hong Kong-based economist with Credit Lyonnais.

Sounds like it was working quite well. Also interest rates as high as 280% only equates to 0.37% that night, considering how short term the disruption they actually survived quite well. The net result the country made out like bandits from the currency traders attack while others fell. “In 1999, the Government started selling those shares by launching the Tracker Fund of Hong Kong, making a profit of about HK$30 billion (US$4 billion).” https://en.wikipedia.org/wiki/1997_Asian_financial_crisis

Compared to say Thailand's booming economy came to a halt amid massive layoffs in finance, real estate, and construction that resulted in huge numbers of workers returning to their villages in the countryside and 600,000 foreign workers being sent back to their home countries.[33] The baht devalued swiftly and lost more than half of its value. The baht reached its lowest point of 56 units to the U.S. dollar in January 1998. The Thai stock market dropped 75%. Finance One, the largest Thai finance company until then, collapsed.

That date rings a bell...

Wikipedias

Yeah, that was the so-called "Asian Contagion" financial crisis. IIRC the US dumped a shitload of money into Mexico and maybe some other countries to stop the dominoes falling. Lots of countries had a bad time right around then.

Right, but what point are you making based on that? That fixed exchange rates work, but they come under severe pressure in a crisis? That's actually an argument against fixed exchange rates.

Lots of countries came under severe pressure in that crisis, and I can't even find evidence that HK was among those worst-affected. I'm saying I'd need to see a lot more than pointing out that late 1997 was a shit year for them, to determine if that was the fault of their currency-pegging. If you are only going to provide a single data point, that's like pointing at the US during the '08 crisis and going "well I guess fiat currency doesn't work!" You're gonna need to connect a lot more dots to make that argument, with that example, because that was just a bad year all around.

Actually, the maybe-relevant part of this is that Thailand kicked it off by screwing up currency-pegging and having to switch to float, which led to a panic. But Hong Kong didn't suffer particularly hard from it, overall, compared to those worst-affected, so using HK in late 1997 as the example of this practice failing still isn't very strong.

(I can't find any mention of the Mexico thing on the Wiki article, but have a weirdly-strong memory of that specific detail being mentioned in an IPE class years and years ago, so either I'm wrong or it's one of those things that's considered a kind of folk-knowledge poli-sci and economics but doesn't make it to places like Wikipedia, some action that "wasn't" directly connected, but [by common understanding of folks in those fields] totally was—further digging reveals an Argentine event in 1998 that did affect Mexico, so I'm guessing that's what I'm recalling and that at the very least that particular professor considered it obviously true that the two events were connected, so presented that as a continuation of the Asian Crisis in late '97)

[EDIT] To be clear I'm not even going hard into the paint for pegging currencies, I just think that's a bad example and that lots of readers may not recall or be aware of the late 90s crises to have context for it, especially fellow US readers.

I'm fairly sure that the fixed exchange rate didn't cause the problems. But I think the interest rate craziness shows that the fixed exchange rate sure didn't help. It took away a knob that they really could have used right then. Since they didn't have it, they had to go insane with the interest rate to try to defend the currency at the fixed price. That didn't make it easier to handle the rest of the crisis.

The interest rate was set in response to a short term economic attack by several investors. But the benefit was consistent outside of that time period.