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HKMA intervenes to defend HK dollar peg, selling HK$3.875 bln
December 10, 2012 / 6:53 AM / 5 years ago

HKMA intervenes to defend HK dollar peg, selling HK$3.875 bln

HONG KONG, Dec 10 (Reuters) - The Hong Kong Monetary Authority (HKMA) stepped into the currency market on Monday, selling HK$3.875 billion ($500 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$208.32 billion on Dec. 12.

Before this intervention, the HKMA had injected a total of $7.2 billion worth of Hong Kong dollars into the market.

The Hong Kong dollar is pegged at 7.8 to the U.S. dollar but can trade between 7.75 and 7.85 to the U.S. dollar. 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 U.S. dollar at 0644 GMT. ($1 = 7.7500 Hong Kong dollars) (Reporting by Michelle Chen; Editing by Anne Marie Roantree and Jacqueline Wong)

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