HK monetary authority intervenes to defend dollar peg
HONG KONG (REUTERS) - The Hong Kong Monetary Authority (HKMA) stepped into the currency market on Tuesday, selling HK$6.2 billion (S$978 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$214.529 billion on Dec 13.
It was the second injection this week. Before this intervention, the HKMA had sold a total of US$7.7 billion (S$9.4 billion) worth of Hong Kong dollars into the market since October 20.
Market players said besides the recent inflows to purchase stocks in Hong Kong, the strength of the local currency was also supported by booming US dollar bond issuances as some of the issuers converted their proceeds to Hong Kong dollars for trade or investment use.