Central bank: HK needs to stay alert to capital outflows

HONG KONG: Hong Kong must stay alert to the possibility of large capital outflows even as its currency has had unusual strength recently due to inflows for acquisitions, dividends and related transactions, a senior official at its central bank said.

Since July 1, the local dollar has repeatedly hit the strong end of the currency peg to the US dollar. That caused the Hong Kong Monetary Authority (HKMA), the de facto central bank, to absorb more than US$5.6bil in inflows and inject more than 40 billion HK dollars into local money markets.