Record of Discussion of the Meeting of the Exchange Fund Advisory Committee Currency Board Sub-Committee held on 2 July 2026

Released on 10 August 2026, the HKMA’s Currency Board Operations Report covers the review period from 23 April to 22 June 2026. The report confirms that the Hong Kong dollar traded steadily within a narrow range of 7.8289 to 7.8397 against the US dollar throughout the period, with orderly and smooth operations in both the foreign exchange and interbank markets. The HKD exchange rate fluctuations were mainly driven by Southbound Stock Connect fund flows and other capital market activities. Aligned with the Linked Exchange Rate System, Hong Kong interbank rates (HIBORs) generally tracked US interest rate movements, while being subject to local HKD funding supply and demand conditions. Overnight HIBOR saw occasional temporary rises due to month-end liquidity tightness and IPO-related funding demands, and longer-tenor HIBORs edged up moderately during the period. No Convertibility Undertakings were triggered, the Aggregate Balance remained stable at around HK$54 billion, and the Discount Window functioned normally with no irregularities recorded. The Monetary Base rose to HK$2,072.94 billion by the end of the review period, and all changes in the Monetary Base were fully backed by corresponding adjustments in foreign reserves, strictly complying with Currency Board operating principles. In terms of global economic risks, the US economy sustained steady growth underpinned by robust AI capital expenditure and resilient household consumption; nevertheless, persistent Middle East conflicts fuelled energy inflation, and a stronger-than-expected labour market revived market concerns over potential Federal Reserve rate hikes, while mounting fiscal sustainability pressures pushed long-term US Treasury yields higher. For the Asia-Pacific region, economies achieved solid Q1 growth largely driven by booming AI-related exports, though regional growth was offset by surging energy-led inflation and local currency