Stabilizing Currency Peg to US Dollar May Be Too Costly for Hong Kong This Time: Expert

Hong Kong and US dollars in Hong Kong on Jan. 12, 2008. The Hong Kong dollar is a currency pegged to the U.S. dollar. Under the LERS, HK$1,000 is worth USD$ 127 as of Jul. 22, 2022. Laurent Fievet/AFP/Getty Images

Hong Kong’s central bank has spent over $22 billion in ten weeks to stabilize the exchange rate of the Hong Kong dollar (HKD) amid weakening market confidence in the city’s currency.

Since May 2022, the Hong Kong Monetary Authority (HKMA), the city’s central bank, has bought HKDs at its fastest pace to keep the U.S. dollar’s (USD) maximum convertible to the HKD at 7.85.