The Hong Kong Monetary Authority (HKMA) has reaffirmed its commitment to the Linked Exchange Rate System, ensuring the Hong Kong dollar’s peg to the US dollar remains firm. This commitment comes amid observations of capital flows into the Hong Kong dollar.

The HKMA has the tools and experience to maintain exchange rate stability as part of its currency board operations. The HKMA stands ready to intervene in the currency market to maintain the peg within its permitted trading band.

Recent capital inflows have prompted some discussion about the peg’s sustainability, but the HKMA maintains that the system is robust and well-equipped to handle fluctuations in capital flows.

The HKMA will continue to monitor market conditions closely and stands ready to take appropriate action to ensure the stability of the Hong Kong dollar.