22 Oct 2012

Hong Kong dollar value lowered

7:03 am on 22 October 2012

Hong Kong has moved to weaken its currency for the first time in three years due to a sharp increase in its value.

The Hong Kong dollar is fixed against the US dollar and reached HK$7.75 on Friday, the upper limit of its trading band.

On Saturday, the Hong Kong Monetary Authority sold HK$4.67 billion of foreign bonds.

The BBC reports foreign investors generally consider Hong Kong as a gateway to mainland China and the yuan - a currency that is not freely tradeable.

Stocks and property values have surged, due to the eurozone debt crisis and the weak US economy. The Hang Seng index is close to a six-month high.

The Hong Kong dollar is allowed to trade in a band between HK$7.75 - HK$7.85 against the greenback.

The last time the HKMA intervened in the currency was in 2008.