HONG KONG: The Hong Kong Monetary Authority (HKMA) stepped into currency markets again on Monday, buying HK$3.59bil (US$457.33mil) in Hong Kong dollars as the currency repeatedly hit the weak end of its allowable trading band.
The latest intervention will reduce the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$166.51bil on April 18, according to Reuters data.
HKMA mopped up HK$9.664mil of Hong Kong dollars from the foreign exchange market on Thursday and Friday after the local dollar hit the weaker end of its trading range at 7.85 per U.S. dollar, nudging up a key lending rate that could push borrowing costs higher.
The moves were the first intervention by the territory’s de facto central banks in foreign exchange markets since 2015.
The Hong Kong dollar is pegged at 7.8 to the U.S. dollar, but can trade between 7.75 and 7.85. Under the currency peg system, the HKMA is obliged to intervene if trading hits either end of the band. - Reuters