Hong Kong’s monetary authorities have reiterated their commitment to maintaining the Hong Kong dollar’s peg to the US dollar. This reassurance comes amid growing speculation regarding potential capital outflows from the region.

The Hong Kong Monetary Authority (HKMA) has emphasized that the Exchange Fund, which serves as the territory’s official reserve, is sufficiently robust to defend the peg. The HKMA also pointed to the banking system’s high liquidity levels as a crucial buffer against any significant capital flight.

“We are fully capable of maintaining the stability of the Hong Kong dollar,” stated a senior HKMA official. “Our commitment to the Linked Exchange Rate System is unwavering.”

Analysts have noted that while some capital outflow is possible due to changing global economic conditions, the HKMA’s strong financial position and its track record of intervention provide a solid foundation for the peg’s continued stability.

The Linked Exchange Rate System, established in 1983, pegs the Hong Kong dollar to the US dollar at a rate of HK$7.80 per US dollar, with a permitted trading band of HK$7.75 to HK$7.85.

The HKMA has consistently intervened in the foreign exchange market to maintain the peg within the specified band, buying or selling Hong Kong dollars as needed.