Hong Kong continues stubborn defense of its dollar

Has spent a total of HK$$6.2 billion to maintain value since October.

The Hong Kong Monetary Authority again stepped into the currency market yesterday, selling HK$3.88 billion in Hong Kong dollars as the currency threatened to exceed the strong end of its trading band.

The latest intervention since October brings to HK$6.2 billion the total amount Hong Kong has spent in repeatedly defending its US dollar pegged currency.

The latest intervention will increase the aggregate balance, or the sum of balances on clearing accounts maintained by banks with the HKMA, to HK$200.66 billion on Dec 7.

The Hong Kong dollar is pegged at HK$7.8 to the U.S. dollar but can trade between HK$7.75 and HK$7.85 to the U.S. dollar. Under the currency peg, the HKMA is forced to intervene when the Hong Kong dollar hits HK$7.75 or HK$7.85 to keep the band intact.