Hong Kong central bank intervenes again, buys HK$20 billion to defend currency peg

Hong Kong's de facto central bank bought HK$20.02 billion during the New York trading session early Wednesday, after the local currency hit the weak end of its trading band.

The city's currency is pegged in a narrow band of 7.75 to 7.85 per US dollar. The Hong Kong Monetary Authority intervenes at both ends to maintain the peg.

The aggregate balance, the key gauge of cash in the banking system, will fall to HK$144.175 billion on July 3, the HKMA said.

This came after last Thursday, June 26, when the Hong Kong dollar hit the weak-side convertibility undertaking level against the greenback, prompting the HKMA to purchase HK$9.42 billion. HKMA Chief Executive Eddie Yue Wai-man said on the same day that such interventions are part of the Linked Exchange Rate System’s design and normal operations.

STAFF REPORTER