Deposits worth $5.5b may have left HK for Singapore as protests rage
HONG KONG: Hong Kong may have lost as much as US$4 billion (S$5.5 billion) in deposits to Singapore between June and August as political unrest escalated in the city, Goldman Sachs estimated this week.
Modest net outflows from local currency deposits in Hong Kong and the net inflows of foreign currency deposits in Singapore in August could be the latest sign showing US$3 to US4 billion left for the city state, the bank's analysts said in a report on Monday.
"That said, the HK banking system still has ample liquidity in Hong Kong dollar as well as in foreign currencies," though "this set of data is unlikely to allay investor concerns around outflows from HK," they said.
Anti-government protests have gripped Hong Kong for four months, with widespread violence this week as China, which resumed ruling the territory in 1997, celebrated the 70th anniversary of the People's Republic. Hong Kong's stockpile of deposits stood at HK$13.6 trillion (S$2.39 trillion) in August, according to Refinitiv Datastream.
But Hong Kong dollar deposits in the city dropped in August for the most in over a year while US dollar savings surged.
Hong Kong Monetary Authority insisted on Monday that the fluctuations were "normal".
The central bank said the uptick in US dollar deposits was driven by a "transfer of funds resulting in a higher amount of foreign-currency deposits placed by the Exchange Fund", which backs Hong Kong's currency peg with the greenback at 7.75 to 7.85.- REUTERS