HKMA sells HK$3.1b to keep Hong Kong dollar in trading band

[HONG KONG] The Hong Kong Monetary Authority (HKMA) stepped into the currency market and sold HK$3.1 billion (US$400 million)in Hong Kong dollars on Monday as the local currency hit the strong end of its trading range.

According to the HKMA, the latest intervention will lift the aggregate balance - the sum of balances on clearing accounts maintained by banks with the authority - to HK$326.932 billion on Sept 9, when the injected funds will be settled.

The Hong Kong dollar is pegged at 7.8 to the US 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.

REUTERS