The Hong Kong Monetary Authority had to buy more than US$1bn yesterday to defend the local currency's peg to the US dollar as the Hong Kong dollar continued to test the upper limit of its trading band on strong demand.

The territory's de facto central bank keeps the Hong Kong dollar in a range of HK$7.75-HK$7.85 to the greenback. The HKMA is committed to buying US dollars in exchange for Hong Kong dollars if the exchange rate hits HK$7.75. A spokesman for the HKMA said that additional purchases could continue overnight through the authority's operations in London and New York.