HKMA defends Hong Kong dollar peg, selling $787m

PHOTO: HKMA defends Hong Kong dollar peg, selling $787m

HONG KONG - The Hong Kong Monetary Authority (HKMA) stepped into the currency market on Friday, selling HK$5.038 billion (S$787 million) in Hong Kong dollars as the local currency repeatedly hit the strong end of its trading range.

According to Reuters data, the latest intervention will lift the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$255.85 billion on Dec. 27.

The cumulative amount of Hong Kong dollars injected into the market since Oct. 20 is $13.831 billion.

The Hong Kong dollar is pegged at 7.8 to the US dollar but can trade between 7.75 and 7.85 to the US currency. Under the currency peg, the HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact.

The currency traded at 7.7500 against the US dollar at 0914 GMT.