Hong Kong Monetary Authority: Between April 23 and June 22, the Hong Kong dollar fluctuated between 7.8289 and 7.8397 against the US dollar, and the exchange rate of the Hong Kong dollar remained generally stable

The Zhitong Finance App learned that on August 7, the Hong Kong Monetary Authority released a report on the operation of the Currency Board for the period from April 23 to June 22, 2026. The Hong Kong Currency Board (the Committee) has learned that during the reporting period, the Hong Kong dollar fluctuated between 7.8289 and 7.8397 against the US dollar. The Hong Kong dollar exchange rate remained generally stable. Fluctuations during this period were mainly driven by capital flows related to the Hong Kong Stock Exchange southbound capital and other capital market activities. Under the linked exchange rate system, the HKD interbank interest rate generally follows the trend of US dollar interest rates. At the same time, it is also affected by the local Hong Kong dollar capital supply and demand situation. Overnight HKD interbank interest rates rose occasionally during the reporting period, reflecting capital market-related capital requirements at the end of the month, while longer-term HKD interbank interest rates rose slightly. The exchange guarantee was not triggered during the reporting period, and the aggregate balance remained stable at approximately HK$54 billion. There were no abnormalities in the use of the discount window. Overall, Hong Kong dollar foreign exchange and interbank market transactions continued to be smooth and orderly.

The Committee was informed that the monetary base had increased to HK$2,072.94 billion at the end of the reporting period. All changes in the monetary base are fully consistent with changes in foreign exchange reserves and are in line with the principles of the currency issuer system.

In terms of monitoring risks and uncertainties, the Committee noted that the US economy maintained its growth momentum with strong AI capital expenditure and steady consumption support. However, the Middle East conflict continues to drive energy-related inflation, and the labor market is stronger than expected, once again raising concerns that the Federal Reserve may raise interest rates. Meanwhile, deepening concerns about fiscal sustainability have led to a sharp rise in long-term bond yields, putting further pressure on future fiscal conditions.

The Committee notes that in the Asia-Pacific region, despite the ongoing conflict in the Middle East, the region's economies recorded steady growth in the first quarter, partly benefiting from strong export performance driven by artificial intelligence. However, energy shocks have boosted inflation in the region, and some regional currencies are facing downward pressure, prompting central banks in some regions to significantly raise policy interest rates.

The Committee notes that Hong Kong's economic growth accelerated in the first quarter, driven by the general strengthening of domestic and foreign demand, and the growth momentum continued into the second quarter. Inflation has picked up somewhat, but is still under control, and the labour market remains generally stable. On the other hand, thanks to the positive market climate, the residential property market maintained an upward momentum, while the commercial property market continued to be pressured, but Grade A office buildings in core regions showed signs of improvement. Looking ahead, economic expectations remain steady, but the outlook is still affected by downside risks, including the Middle East conflict, the sustainability of the AI investment boom, evolving global trade policies, and the trend of US policy interest rates.