HKMA buys $12.7b to defend peg

The Hong Kong Monetary Authority stepped into the market and bought HK$12.796 billion to stop the local currency from further weakening, for the first time in nearly a month.

The aggregate balance of Hong Kong's banking system will be reduced to HK$220.404 billion after July 18.

Since May 12, the HKMA has intervened in the market 15 times this year, buying a total of HK$117.075 billion and selling US$14.9 billion amid persistent capital outflows.

The exchange rate of the Hong Kong dollar rose slightly to 7.8495 after the announcement.

Meanwhile, foreign assets of the Exchange Fund decreased by HK$143 billion to HK$3.7 trillion in June, the HKMA said yesterday.

The balance of the banking system and Exchange Fund bills and notes issued amounted to HK$2.048 trillion.

Claims on the private sector in Hong Kong amounted to HK$264.4 billion, according to the statement.

In other news, HKMA chief executive Eddie Yue Wai-man revealed that more than two-thirds of A-shares held by international investors are invested through the Stock Connect, and more than half of the trading of mainland onshore bonds is done through the Bond Connect.