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Hong Kong Intervenes To Curb Currency Surge, First In Four Years
- By The Financial District
- May 5
- 1 min read
The Hong Kong Monetary Authority (HKMA) sold HK$46.54 billion (approximately $6 billion) into the market to curb the local currency's appreciation, marking its first intervention to defend the peg against the U.S. dollar since October 2020, Reuters reported.
The Hong Kong dollar is tightly pegged to a band between 7.75 and 7.85 per U.S. dollar.
The Hong Kong dollar is tightly pegged to a band between 7.75 and 7.85 per U.S. dollar. The HKMA intervened after the currency touched the stronger end of that range, prompting action to maintain stability.
“Seeing the HKD getting stronger means capital inflows, which is not problematic for Hong Kong,” said Gary Ng, a senior economist at Natixis.
The intervention will increase the aggregate balance—a key liquidity indicator in the banking system—to HK$91.31 billion on May 7, the HKMA said in a statement.
