Hong Kong Monetary Authority intervenes to protect HKD peg, sells $380m
Published on Aug 5, 2014 9:31 AM
HONG KONG (Reuters) - The Hong Kong Monetary Authority (HKMA) stepped into the currency market early on Tuesday morning Hong Kong time, selling HK$2.364 billion (S$380 million) in Hong Kong dollars as the local currency repeatedly hit the strong end of its allowable trading band.
The latest intervention will lift the aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$238.025 billion on August 7, according to Reuters data.
The Hong Kong dollar is pegged at 7.8 to the United States dollar, but can trade between 7.75 and 7.85.
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.