Hong Kong currency to US Dollar
The Hong Kong Monetary Authority said it bought $1.2 billion today at HK$7.75 a dollar, the upper limit of a convertibility range of HK$7.75 to HK$7.85 that triggers intervention. The move was disclosed on the HKMA’s Bloomberg page and confirmed by phone.
“Demand for the Hong Kong dollar increased lately, ” the monetary authority said in a press release. That was partly driven by “commercial activities, including merger and acquisition activities and dividend distribution, ” it said.
The Hong Kong dollar was little changed at 7.75 per dollar as of 9:29 p.m. local time. The monetary authority injected a total $13.8 billion into the system in 2012 to defend the currency peg, according to data compiled by Bloomberg.
Hong Kong pegged its currency to the U.S. dollar in 1983 when negotiations between China and the U.K. over the city’s return to Chinese rule spurred capital outflows. In 2005, policy makers committed to limiting the currency’s decline to HK$7.85 per dollar and capping gains at HK$7.75.
When the Hong Kong dollar reaches the so-called strong end of the trading range, the HKMA offers to buy U.S. dollars to prevent further appreciation under its currency board system.
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