HKMA sells HK$5.425 bln to keep HK dlr in trading band

HONG KONG Nov 10 (Reuters) - Hong Kong's central bank, the Hong Kong Monetary Authority (HKMA), on Tuesday injected HK$5.425 billion (US$700 million) into the money market to stem an appreciating Hong Kong dollar HKD= and keep it within its fixed trading band.

This followed a HK$4.65 billion intervention by the HKMA in New York trade on Monday.

Both Monday and Tuesday's interventions would be settled on Nov. 12 because of a U.S. holiday on Nov. 11, the HKMA said.

The local currency repeatedly hit the top of its trading band at 7.7500 on Tuesday as the U.S. dollar remains weak and upcoming IPO activity in Hong Kong boosted demand for the Hong Kong dollar.

The city has been attracting fund inflows over recent months as its currency peg to a weak U.S. dollar makes Hong Kong assets look attractive.

According to data on Reuters page HKMAOOC, the latest intervention will lift the aggregate balance -- the sum of balances on clearing accounts maintained by banks with the HKMA -- to HK$269.92 billion by Nov. 12.

The Hong Kong dollar is pegged at 7.80 to the U.S. dollar but can trade between 7.75 and 7.85 to the U.S. dollar.

Under the linked exchange rate mechanism, the HKMA is obliged to intervene in the market to keep the trading band intact if the currency hits 7.75 or 7.85.

By 0307 GMT, it was quoted at 7.7500/01. (Reporting by Christina Lo, Editing by Chris Lewis)