The Government moved into Hong Kong's equity market for a second day yesterday, throwing up to $1 billion at share prices in a bid to relieve pressure on the Hong Kong dollar, according to brokers. The Hang Seng Index dropped just 13.77 points to 7,210.92 points, largely holding Friday's 8.47 per cent gain, which came as the Hong Kong Monetary Authority launched its unprecedented foray into the stock market. Money-market traders said despite the official action the Hong Kong dollar remained under attack in Asian trade yesterday, forcing interbank rates higher and raising fears that the currency-board system would face months of pressure. Acting Financial Secretary Rafael Hui Si-yan said the Hong Kong dollar also came under sustained speculative pressure on Monday in international markets. 'Overnight in London and New York, there was continuous selling of Hong Kong dollars, but not to a very great extent. 'So strictly speaking the activities had not ceased, but nor had they blossomed,' Mr Hui said. 'The [Government's] objective is to provide a response to the currency play, in other words, betting against the Hong Kong dollar. That is the only context.' Brokers said that Worldsec International, Bank of China Securities, Wardley Securities and Roctec Securities were again seen in the market executing trades on behalf of the Government. 'I see that the Government is still here, but not as aggressively as on Friday. Today is the follow-through orders. It is the same few brokers [that are executing Government trades] buying HSBC and Hongkong Telecom,' Anglo Chinese Securities senior dealing manager Herman Chu Hok-man said. 'Most of the reaction from people in the business is that this is a stupid thing to do . . . Speculators may stay out for a while, but they will be back.' Since the Asian financial crisis erupted in July last year, central banks and Government bodies across the region devoted billions of hard-currency dollars to futile attempts to protect the value of their domestic units. Previously, the Hong Kong Government denied a dual share-market money-market ploy was being used by hedge funds in the SAR. 'If you weigh all the opportunity costs of the stock market going to hell in a hand basket and the currency going, they figure it is one way to combat speculators,' one broker said. 'It's much more modest today, although it's very difficult to tell.' Russia's decision on Monday to effectively devalue the rouble was seen having little impact in the blue-chip market despite earlier fears that it could provide an excuse for renewed selling. On money markets, both the one-month and three-month interbank rates rose 112.5 basis points to 12.125 per cent. The overnight rate hit a high of 10 per cent before closing at 8 per cent, down 50 basis points from last Friday. The Hong Kong dollar spot exchange rate, meanwhile, strengthened marginally to $7.749 per US dollar from $7.7499 before the weekend. Commonwealth Bank of Australia treasurer Andrew Fung Hau-chung said the strengthening of the Hong Kong dollar was largely driven by the rebound of the Japanese yen back to the level of 145 yen per dollar. He said, however, that bonds issued by entities in emerging markets were under heavy selling pressure yesterday and their yields were traded at a significant premium to that of US Treasury papers. The higher premium could make rates stay at high levels, he added. One banker said: 'The speculators have not gone. They are waiting for bad news to launch another attack of the local currency peg link system. 'They are also waiting for the expiry day of the Hang Seng Index futures next week,' he said. 'That would be the time for the real battle between the Government and the speculators.'