Hong Kong Monetary Authority Buys HK$29.6 Billion, Sells US$2.55 Billion to Defend Dollar Peg Amid Volatility

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Updated Jul 3, 2025, 09:48 PM

The Hong Kong Monetary Authority (HKMA), the city's de facto central bank, has actively intervened in the foreign exchange market to defend the Hong Kong dollar's peg to the US dollar amid recent currency volatility. Since late June 2025, the HKMA has purchased substantial amounts of the local currency, including an initial acquisition of HK$9.42 billion and subsequent increases to HK$16.878 billion and HK$29.634 billion by early July. These interventions involved selling US dollars, with a spokesperson confirming sales of US$2.55 billion to maintain exchange rate stability. The HKMA's actions aim to ensure orderly market operations and uphold the currency peg as the Hong Kong dollar approached the weak end of its trading range. Despite these measures, borrowing costs in Hong Kong have fallen to nearly zero, and the one-month Hong Kong Interbank Offered Rate (HIBOR) has remained stable. The central bank's interventions mark its first currency purchases since 2023, reflecting efforts to counter pressures from fluctuations in the US dollar and maintain confidence in the Hong Kong dollar's fixed exchange rate system.

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