HKMA Buys $1.6 Billion in Currency Defense on Merger Demand

Hong Kong’s de facto central bank bought $1.63 billion this week to maintain the city’s 31-year-old currency peg to the greenback as merger activity boosted demand for the local dollar.

The Hong Kong Monetary Authority made purchases on July 1 for the first time since December 2012 and said demand for the local currency “increased lately,” partly driven by “commercial activities, including merger and acquisition activities and dividend distribution.” The authority, known as the HKMA, said today it has no further comments to add to last week’s statement.