HK dollar stays on the strong side, Hibors ease

HONG KONG, Nov 17 (Reuters) - The following is a snapshot of the Hong Kong foreign exchange and money market on Tuesday. Latest Previous Day At 0602 GMT At 0643 GMT HK$ SPOT 7.7500/01 7.7500/01 FORWARDS Three-month -50/-47 -50/-47 Six-month -110/-105 -114/-104 One-year -247/-237 -252/-243 INTERBANK RATES (PERCENTAGE) Overnight 0.001/0.05 0.005/0.05 One-month 0.06/0.09 0.06/0.10 Three-month 0.10/0.14 0.10/0.15 Six-month 0.30/0.35 0.30/0.36 One-year 0.51/0.61 0.60/0.64 For more live quotes of forwards and interbank rates, click on. * The Hong Kong dollar continued to trade at the top of its trading band on Tuesday, but there was no intervention by the city's central bank in New York trade on Monday after the Hong Kong government pledged to keep its currency pegged to the U.S. dollar and said it would not change its trading band. The HKMA told Reuters on Monday that the pegged system was "well equipped" to cope with capital inflows and that it would not re-peg or widen the Hong Kong dollar's trading band even if China's currency appreciated. Hong Kong chief executive Donald Tsang, speaking in Singapore on Monday, said the peg had served Hong Kong well over the past two decades and it would stay as long as he is in office. Tsang's term will end in 2012. * Dealers said the Hong Kong Monetary Authority (HKMA) did not need to intervene because a recent inflow of funds to subscribe to China Minsheng Bank's IPO was slowing down. Minsheng's offering is nearing its end and the shares will list in Hong Kong stock market on Nov. 26. But one dealer at a local bank expected the local currency to remain strong as investors would continue to park money in higher-yielding assets and emerging markets, with the U.S. dollar continuing to lose ground and U.S. interest rates likely to stay low for some time. * Funds have been pouring into Hong Kong assets in recent months, pushing the Hong Kong dollar to the top of its trading band, prompting the HKMA to intervene actively. The HKMA stressed on Monday that any appreciation of the Chinese yuan would not lead to an adjustment in the Hong Kong dollar currency peg. From October to Nov. 16, the HKMA has injected more than HK$164 billion into the territory's banking system to defend the currency peg, lifting the aggregate balance -- a measure of interbank liquidity -- to HK$306.365 billion. * The Hong Kong dollar is pegged at 7.80 to the U.S. dollar but can trade between 7.75 and 7.85. The HKMA is usually obliged to intervene when the local currency hits 7.75 or 7.85. * Local interbank rates remain at a low level because of abundant liquidity in the banking system. Three-month Hibor was fixed at 0.13893 percent, its lowest level since April, 2004, and was down from Monday's 0.14929 percent. * A dealer at a European bank said Hong Kong dollar interest rate swaps (IRS) fell on Tuesday, tracking lower U.S. bond yields overnight after Federal Reserve Chairman Ben Bernanke repeated the U.S. central bank's pledge of keeping rates near zero to sustain economic growth. * The Hong Kong government will release unemployment data for August-October at 0830 GMT. MARKET/ECONOMIC NEWS > Stock market reports and updates: > Yuan reports and updates: > U.S. dollar reports and updates: > Emerging Asia forex reports and updates: (Reporting by Christina Lo; Editing by Jonathan Hopfner) (([e-mail]; [phone]; Reuters Messaging:[e-mail])) For more information on Top News, visit http://topnews.reuters.com Hong Kong news Hong Kong stock report China news Hong Kong hot stocks All foreign exchange Hong Kong diary Press digests Keywords: MARKETS HONGKONG/FORWARDS (If you have a query or comment on this story, send an email to [e-mail])) (Multimedia versions of Reuters Top News are now available for: * 3000 Xtra: visit http://topnews.session.rservices.com * BridgeStation: view story .134 For more information on TopNews, please visit http://topnews.reuters.com) COPYRIGHT Copyright Thomson Reuters 2009. All rights reserved.

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