HKMA busy defending 7.75 USDHKD with intervention
Multiple intervention operations in currency market
Hong Kong Monetary Authority is really busy this month with multiple interventions to buy USD, sell HKD to maintain the USDHKD above 7.75 under its Linked Exchange Rate System or LERS. Here is the backstory.
In short, currency players do not agree with HKMA’s determination of USDHKD exchange rate. Back in January, we saw how the Swiss National Bank famously lose its plot for EURCHF Minimum Exchange Rate. It is also quite telling what kind of risk currency players associate USDHKD’s LERS with since it is no longer a tradable currency pair after what happened to Alpari UK and FXCM.
The Hong Kong Monetary Authority (HKMA) stepped into the currency market again and sold HK$6.2 billion ($800 million) in Hong Kong dollars on Friday as the local currency hit the strong end of its trading range.
It was the second time the city’s de-facto central bank intervened the market since August. The HKMA sold HK$3.1 billion on Thursday.
The Hong Kong Monetary Authority (HKMA) intervened in the currency market again late on Friday, selling a total HK$14.88 billion ($1.92 billion) in Hong Kong dollars as the local currency hit the strong end of its trading range.
The city’s de-facto central bank, which has intervened multiple times in the market in the past fortnight, had sold HK$13.18 billion ($1.70 billion) earlier that day.
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