Hong Kong sells HK$3.1 billion to weaken currency

Hong Kong sells HK$3.1 billion to weaken currency

HONG KONG - Hong Kong's de facto central bank on Tuesday said it intervened in the currency market to weaken the local dollar, preventing it from strengthening past its trading peg with the US dollar.

The Hong Kong Monetary Authority (HKMA) sold HK$3.1 billion (S$489 million) in the forex markets after the US dollar hit HK$7.75, the lower end of the trading band between the local unit and the greenback.

The authority is obliged to act by buying or selling the local dollar whenever it touches either side of the HK$7.75-HK$7.85 trading band against the US dollar, to which it has been pegged for 29 years.

The latest move increased the southern Chinese city's aggregate balance, a measure of the city's interbank liquidity, to HK$183.95 billion, Dow Jones Newswires reported.

The HKMA has made multiple interventions since mid-October due to the strengthening of the Hong Kong dollar as a result of the US Federal Reserve launching a third round of quantitative easing.

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