The city’s de facto central bank sold HK$9.532 billion worth of the local currency and bought US$1.23 billion at HK$7.75 per US dollar on Monday, according to an HKMA statement.
The combined actions would increase the city’s aggregate balance – a gauge of interbank liquidity – to HK$100.841 billion on May 7, more than double its previous level of HK$46.54 billion, the HKMA said.
The city’s currency has been pegged to the US dollar since 1983. Under the current system, in place since 2005, the HKMA intervenes to maintain the currency within a narrow band of HK$7.75 to HK$7.85 per US dollar.
The interventions came amid a wave of capital inflows, driven by increased investor interest in Hong Kong stocks and steady southbound buying from mainland Chinese investors via the Stock Connect mechanism.
