New rules will be introduced today by the Hong Kong Futures Exchange in an attempt to curb speculation against the territory's currency, which is at the centre of a fierce battle in financial markets.

The rules include a sharp increase in the cost of holding large futures positions. Although the exchange denied the measures had been prompted by government pressure, they may add to concerns about the administration's intervention in financial markets. The Hong Kong government has been using the territory's foreign exchange reserves to buy shares to defend the currency.

After an escalation on Friday, when US$7 billion was spent by the financial authorities, the battle is expected to continue this week. China promised at the weekend to help Hong Kong in its battle against speculators in the first clear sign that it may be prepared to use some of its US$140 billion foreign exchange reserves to help prop up the currency.

Mr Li Guobin, a senior Chinese government economist, accused international fund companies of spreading lies and rumours about a possible devaluation of China's renminbi currency which, he said, were aimed at undermining the Hong Kong dollar.