HKMA  plows HK$13b to defend HK dollar

Business | 28 Apr 2020 9:55 am

Hong Kong Monetary Authority has intervened again to defend the local dollar’s peg, after the currency returned to the strong end of its trading band.

The HKMA  sold HK$13 billion (US$1.68 billion) of Hong Kong dollars in exchange for US dollars today local time, according to its page on Bloomberg.

It sold HK$7.71 billion of local dollars in multiple actions last week, its first such intervention since October 2015.

The Hong Kong dollar traded at 7.7510 per greenback as of 9:22 a.m. local time, according to data compiled by Bloomberg. It has strengthened by 0.5 percent this year, the second-best performer after the yen among 31 major currencies.

Funds have flowed into the Hong Kong dollar to take advantage of higher interest rates relative to the greenback.

The selling of Hong Kong dollars by the HKMA will add to liquidity in the city, which is suffering from the effects of the coronavirus pandemic. One-month interbank borrowing costs in the local currency, known as Hibor, were at 1.46 percent on Monday, compared with 0.44 percent for Libor.


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