The Hong Kong dollar weakened on Wednesday as funds continued to flow out of the territory, forcing the de facto central bank to step in three times to defend the currency's peg to the US dollar.
The Hong Kong Monetary Authority (HKMA) reported it had bought a total of HK $2.184 billion (US $280 million) worth of Hong Kong dollars from banks.
After the HKMA intervention, the Hong Kong currency was still trading at 7.7999/7.80 per US dollar versus HK $7.7998/99 in late Asian trade on Tuesday.
Under Hong Kong's currency board system, the HKMA is committed to defending the pegged rate of HK $7.8 by buying Hong Kong dollars in exchange for US dollars.
"I'm not surprised at the outflow as the local currency has weakened over the past weeks on the heels of wider differentials between Hong Kong and US interest rates," one trader said.
The local currency has suffered selling pressure recently on arbitrage trades, after the Fed raised rates by 25 basis points at the end of June but Hong Kong banks left rates unchanged.
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