The Hong Kong Monetary Authority (HKMA), the city's de facto central bank, has actively intervened in the foreign exchange market since late June 2025 to defend the Hong Kong dollar's peg to the US dollar. The HKMA has purchased a total of approximately HK$87 billion over three weeks, including HK$9.42 billion on June 26, HK$20.02 billion on July 2, HK$29.63 billion on July 4, HK$13.3 billion on July 11, and HK$14.83 billion on July 15. These interventions were prompted by the Hong Kong dollar reaching the weak end of its official trading range, triggering concerns over the stability of the currency peg amid volatility in the US dollar. The HKMA has also sold US$2.55 billion to maintain exchange rate stability. The interventions have led to a surge in overnight borrowing costs for Hong Kong banks, with the one-month Hong Kong Interbank Offered Rate (HIBOR) rising significantly to its highest level in nearly five months, indicating tightening liquidity in the money market. Despite these efforts, authorities acknowledge that the currency defense poses challenges to Hong Kong's nascent economic recovery. The HKMA has stated it has no plans to establish a "bad bank," affirming that local banks maintain healthy balance sheets. Commentary from regional analysts suggests that the primary risk to the Hong Kong dollar peg may stem from policy developments in Washington rather than market forces.