$1.55b Spent To Buy US Dollars

The Monetary Authority has sold $1.55 billion to the market in exchange for US dollars, in the first triggering of the strong-side Convertibility Undertaking since October 2015.

The authority said the strong-side Convertibility Undertaking of $7.75 to US$1 was triggered today during Hong Kong trading hours.

Its Chief Executive Eddie Yue said the move was conducted in accordance with the Linked Exchange Rate System’s design, which has been operating effectively.

“The Hong Kong dollar exchange rate has been on a strengthening bias recently, mainly driven by increases in market carry-trade activities and equity-related demand for Hong Kong dollars.

“In addition to the current strong market demand for Hong Kong dollars, increases in fiscal spending will also raise demand for Hong Kong dollars."

As risks posed by COVID-19 on the global economy are still evolving, financial markets will continue to see considerable volatility, Mr Yue said, adding the authority will continue to closely monitor the market situation.