Hong Kong's de facto central bank intervenes to defend currency peg


A Hong Kong dollar note is seen in this illustration photo May 31, 2017. REUTERS/Thomas White/Illustration/File Photo

HONG KONG: Hong Kong's de-facto central bank said it intervened twice on Friday and sold $3.78 billion against the Hong Kong dollar after the local currency hit the weak end of its trading band.

The city's currency is pegged between 7.75-7.85 to the U.S. dollar, and the Hong Kong Monetary Authority (HKMA) intervenes at both ends to underpin the peg.

The aggregate balance, the key gauge of cash in the banking system, will shrink by a total of HK$29.6 billion to HK$114.5 billion next Monday, HKMA said in a statement.

This follows $2.25 billion sold earlier this week and $1.2 billion last week to defend the peg.

The Hong Kong dollar traded at 7.8479 against the greenback in early Asia trade. - Reuters

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