Hong Kong’s monetary authority spent HK$15.5 billion in two money market interventions Tuesday to prevent the territory’s currency from breaking through its dollar peg’s upper limit due to inflows from investors switching out of the yuan following that currency’s devaluation last month, South China Morning Post reported. When the Hong Kong dollar hit the high end of its peg to the US dollar, the quasi central bank was forced to buy a total US$2 billion of the latter, selling the equivalent in the former to weaken the local currency. Should the US Federal Reserve raise interest rates this month both currencies could be further strengthened.
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