HKMA sells HK$2.325 bln to keep HK dlr in trading band

HONG KONG Nov 23 (Reuters) - Hong Kong's central bank, the Hong Kong Monetary Authority, on Monday afternoon injected HK$2.325 billion (US$300 million) into the money market to stem an appreciating Hong Kong dollar HKD= and keep it within its fixed trading band.

The Hong Kong dollar hit the top of its trading band at 7.7500 on Monday as money poured into the stock market, dealers said. Hong Kong has seen massive capital inflows in recent months as a weak U.S. dollar and very low interest rates make asset prices attractive and on market expectations that China could soon resume appreciation of its yuan CNY=CFXS currency.

According to data on Reuters page HKMAOOC, the latest intervention will bring the aggregate balance -- the sum of balances on clearing accounts maintained by banks with the HKMA -- to HK$308.290 billion by Nov. 25, taking into account the issue of HK$14 billion in additional Exchange Fund bills.

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 0931 GMT, it was quoted at 7.7500/01. (Reporting by Christina Lo, writing by Susan Fenton; Editing by Chris Lewis) ((susan.fenton@thomsonreuters.com; +852 2843 6367; Reuters Messaging: susan.fenton.thomsonreuters.com@reuters.net)) ((If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com))