Currency intervention has already become the new normal in Hong Kong—The Hong Kong Monetary Authority (HKMA) bought HK$5.99 billion (US$763.1 million) as the local dollar hit the weak end of its trading band.
The intervention, which happened in U.S. trading hours on Friday, brought the total purchase of the HKMA last week to HK$19 billion.
The amount is estimated to reduce the forecast aggregate balance - the sum of balances on clearing accounts maintained by banks with the HKMA - to HK$109.463 billion on May 23, when the withdrawn funds will be settled, according to Reuters data.
The de-facto central bank has started to intervene—for the first time since 2005—to defend the peg since mid-April.
The Hong Kong dollar is pegged at 7.8 to the U.S. dollar but can trade between 7.75 and 7.85. Under the currency peg, the HKMA is obliged to intervene when the Hong Kong dollar hits 7.75 or 7.85 to keep the band intact.