HKMA injects HK$70.6b through open market since

It’s 66% of amount injected in 2012.

It has been reported that the HKMA has injected around HK$70.6b (US$91b) through the open market since July.

According to a research note from CCB International Securities Limited, this is equivalent to 66% of the total amount the HKMA injected in 2012 (US$13.8b).

Meanwhile, the Hong Kong dollar was noted to have remained strong in early August, hovering in the 7.750-7.751 range.

Here’s more from CCB International Securities Limited”

The HKMA was compelled to spend HK$5.6b to buy US dollars on the open market last week in order to weaken the Hong Kong dollar.

We think the major reasons for the strong Hong Kong dollar are loose monetary policy in the Eurozone and the more stable Chinese economy with its moderately loose monetary policy, which is attracting international funds back to the Asia and Hong Kong markets.

The Shanghai-Hong Kong Stock Connectand the increasing size of QFII/RQFII also attracted international funds.

The VIX fell from 17.03 two weeks ago to 15.77 last week while the Hong Kong Volatility Index declined from 16.53 two weeks to 15.69 last week, indicating smaller market volatility.