HKMA intervenes twice more to defend currency peg amid capital inflows ahead of major IPOs

Interventions by the city’s de facto central bank are likely to continue ahead of coming IPOs, HKMA chief executive Eddie Yue says

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Exchange Square in Central. Photo: Jelly Tse

Published: 1:39pm, 6 May 2025Updated: 2:29pm, 8 May 2025

The Hong Kong Monetary Authority (HKMA) intervened in the financial markets twice on Tuesday to defend the local currency’s peg with the US dollar, as capital flowed in ahead of some major share listings in the near future.

In its third market intervention since Saturday, the city’s de facto central bank bought US$7.81 billion worth of US dollars at HK$7.75 and sold HK$60.54 billion worth of the local currency during New York’s Monday trading hours, according to a Tuesday morning statement from the authority. The move came just hours after the HKMA’s second intervention on Monday.

The authority intervened again on Tuesday evening by buying US$1.65 billion worth of US dollars at HK$7.75 and selling HK$12.79 billion, the authority said in another statement.

In total, the HKMA has spent HK$129.4 billion to buy US$16.7 billion worth of US dollars to weaken the local currency, which in recent days had hit the strong end of its trading band. After the latest intervention, the local currency traded at HK$7.7501 per US dollar as of 5.50pm.

Hong Kong’s currency peg with the US dollar has been in place since 1983. Since 2005, the authority has intervened when necessary to keep the exchange rate within a trading band of HK$7.75 to HK$7.85 per US dollar.

After settlement on May 8, the interventions would raise the HKMA’s aggregated balance – a measure of the Hong Kong banking sector’s liquidity – to HK$174.1 billion, the HKMA said. That would amount to 3.9 times the current level of HK$44.61 billion.

HKMA’s chief executive Eddie Yue Wai-man said the interventions were set to continue amid high capital inflows to the stock market, including coming initial public offerings.