Name: SCMP
Telephone: +852-2680-8888

bodyType

customContents

entityId

entityUuid

articlePageQuery

filter

article

articleBaseAdvertisingInfoArticle

articleListArticle

articleSeoArticle

helpersCheckIsPostiesArticle

hooksArticleAcknowledgementGateOverlayArticle

hooksTrackPageViewArticle

hooksContentInterestArticle

articleLinkingDataContent

articleSchemaContent

liveArticle

advertZone

sentiment

contentLock

topics

types

sections

moreOnThisArticles

urlAlias

commentCount

sponsorType

authorLocations

authors

paywallTypes

corrections

displaySlideShow

multimediaEmbed

printHeadline

seriesContainer

socialHeadline

headline

flag

firstTopic

glossary

flattenTypeIds

publishedDate

additionalInfoBoxes

images

image

relatedLinks

relatedNewsletters

__typename

createdDate

sponsor

factSheets

series

disableOffPlatformContent

published

updatedDate

summary

subHeadline

body

keywords

copyrighted

customTimezone

liveContents

Paggie Leung

Enoch Yiu

The Hong Kong Monetary Authority stepped into the currency market again yesterday to weaken the Hong Kong dollar as the rush of "hot money" continues to flow into the city.
The de facto central bank intervened twice, selling a total of HK$12.013 billion in Hong Kong dollars, in a move to maintain the exchange rate within its official limits.
The latest intervention increased Hong Kong's aggregate balance - the sum of balances on clearing accounts maintained by banks with the authority - to HK$220.341 billion.
The authority sold HK$6.2 billion in Hong Kong dollars in the first intervention yesterday and later sold HK$5.813 billion.
"The Monetary Authority needs to intervene because of the influx of hot money amid the third round of quantitative easing by the United States," financial services sector legislator Christopher Cheung Wah-fung said.
"The hot money would flow to the stock market, as shares are now undervalued. So the stock market would benefit in the short term, though hot money may flee quickly," Cheung said.
Since mid-October, the HKMA has made multiple interventions to mitigate the strengthening of the Hong Kong dollar as a result of the US Federal Reserve launching a third round of quantitative easing, which ultimately injects liquidity into global markets.
The Hong Kong dollar is pegged to the US dollar and must trade within a range of HK$7.75- HK$7.85 to the greenback.
The HKMA sells the Hong Kong dollar when the exchange rate appreciates to its stronger limit of HK$7.75.
Conversely, it buys the local unit to support it when it dips to its weaker limit.
The authority's chief executive, Norman Chan Tak-lam, warned on Monday of potentially volatile investment markets ahead due to hot money flowing into the city.
Chan said the HKMA had already bought US$7 billion by selling the equivalent amount of Hong Kong dollars since mid-October in its efforts to weaken the local currency.
Such action is not unprecedented in the city. The authority was obliged to intervene significantly during the global financial crisis that began in 2008 to manage an inflow of capital between October 2008 and the end of 2009 that it has estimated at HK$640 billion.


Hong Kong interest rates volatility price to pay as spectre of Trump tariffs looms

US Fed’s caution on 2025 rate cuts drives Chinese stocks, currency lower

Hong Kong banks cut lending rates even as HKMA warns of volatility ahead

Mainland Chinese investors not impressed with Wealth Management Connect expansion

Hong Kong Monetary Authority (HKMA)

HKMA in HK$12 billion currency cooling measure

External view of Hong Kong Monetary Authority at International Financial Centre, Central. Photo: Sam Tsang

Business

Money

Markets & Investing

Economy

Global Economy

De facto central bank steps into market again to offset US Fed's rounds of quantitative easing


Quantitative Easing

US Federal Reserve