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Hong Kong Protects Local Currency in Forex Market Amid Capital Flight to US Dollar

September 29, 2022


While the euro and pound sterling lost 12-17% against the U.S. dollar during the last six months, there’s been a significant amount of capital flight to the greenback. The Hong Kong dollar (HKD), however, has fared better than a myriad of fiat currencies worldwide against the U.S. dollar.

On Wednesday, September 28, reports detail that a “flight of capital from the Hong Kong dollar market” pushed the HKMA to step in and defend the HKD in forex markets. South China Morning Post (SCMP) reporter Enoch Yiu explained on Wednesday that the HKMA said it intervened in order to “support the peg after the local currency hit the weaker end of its HK$7.75 to HK$7.85 trading band.”