The Hong Kong dollar was a tad weaker against the US dollar, with sentiment hurt by a plunge in the domestic stock market after China's central bank said it would raise banks' reserve requirements to cool rampant credit and investment growth in the world's third-largest economy. The local currency was quoted at 7.7551 versus the US dollar, having earlier hit a session low of 7.7556.
Hong Kong attracted a record HK$640 billion in fund inflows between October 2008 and December 2009, forcing massive intervention by the Hong Kong Monetary Authority (HKMA) to defend the currency peg. The Hong Kong dollar is pegged at 7.80 to the US dollar but can trade between 7.75 and 7.85. Under the currency peg, the HKMA is obliged to intervene when the local currency hits 7.75 or 7.85 to keep the band intact.