This undated photo shows the building of the Hong Kong Monetary Authority. (PHOTO / IC)

HONG KONG - The Hong Kong Monetary Authority bought HK$1.586 billion ($202 million) from the market on Thursday to stop the local currency weakening and breaking its peg to the US dollar, the first time it has intervened in eighteen months.

The Hong Kong dollar is pegged to a tight band of between 7.75 and 7.85 versus the US dollar.

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It has been softening in recent months as US interest rates rise while a surfeit of cash in the local banking system has kept Hong Kong rates pinned down.