1998 At the beginning of August, while the American stock market was in turmoil and the yen exchange rate continued to fall, international speculators launched a new round of attacks on Hong Kong. Quantum Fund and Tiger Fund began to speculate in Hong Kong dollars. At first, they borrowed a lot of Hong Kong dollars from banks, sold them in the market, exchanged them for dollars to earn interest, and sold a lot of Hong Kong stock futures. The former will lead to a sharp rise in interest rates, leading to a decline in the stock market, thus making profits in the futures market; At the same time, once the Hong Kong dollar falls, they can also make profits in the foreign exchange market, killing two birds with one stone. The Hang Seng Index has fallen to over 6600 points. In response, the Government of the Hong Kong Special Administrative Region raised interest rates substantially, reaching 300% in overnight rate, using nearly HK$ 654.38+02 billion (about US$ 654.38+05 billion) in foreign exchange reserves, buying a large number of Hong Kong stocks, absorbing the Hong Kong dollars sold by international speculators, and stabilizing the foreign exchange market at the level of HK$ 7.75 to US$ 654.38+0. As a result, speculators were forced to close their positions at a high price on August 28, and the losses were serious. In this campaign, the Hong Kong government used a lot of foreign exchange reserves to invest in the stock market. At one time, it occupied 7% of the market value of Hong Kong stocks and became a major shareholder of some companies. Once the stock market falls, the linked exchange rate may collapse. Therefore, by June 1999 1 1, the Hong Kong stocks purchased by the Government will be listed on TraHK and sold back to the market in batches. A large part of Hong Kong's capital comes from the mainland.