HONG KONG, April 12 (Xinhua) -- The Hong Kong Monetary Authority (HKMA) on Thursday bought 816 million HK dollars from the market, the first such operation since 2015, as the HK dollar hit the weaker end of its trading range.
The action was taken after the weak-side Convertibility Undertaking (CU) of 7.85 HK dollars against the U.S. dollar was triggered during London trading hours on Thursday.
The Aggregate Balance will reduce by that amount to 179 billion HK dollars on next Monday.
Norman Chan, chief executive of the HKMA, said this is the first time that the weak-side CU of 7.85 is triggered after the HKMA shifted the weak-side CU to that level in 2005, as part of the 'Three Refinements' to the operation of the Linked Exchange Rate System.
He reiterated that the HKMA will buy HK dollars and sell U.S. dollars at 7.85 level to ensure that the HK dollar exchange rate will not weaken beyond 7.85 and such operations are normal and in accordance with the design of the Linked Exchange Rate System.
"Depending on capital flows, the weak-side CU may be triggered again in the future. The HKMA is fully capable of maintaining the stability of the HK dollar and managing large scale capital flows. There is no need to be concerned," he said.
