Hong Kong's foreign exchange reserves fell 3.8 per cent last year to US$92.8 billion at the end of December from $96.5 billion in November.
It was the first time they have fallen since July last year.
'The fall in foreign currency assets in December can be attributed to the decline of Hong Kong dollar interest rates in December,' the Hong Kong Monetary Authority said yesterday.
'Short-term capital attracted to the Hong Kong dollar by high interest rates in November reversed in December, bringing reserves to the level comparable to that at the end of October.' Despite the slight fall, the SAR's reserves remain at a level about 10 times the currency in circulation and Hong Kong remains the third-largest holder of foreign currency in the world after Japan and the mainland.
'As at the end of December, the foreign currency assets held in the Exchange Fund were $75.3 billion and in the Land Fund were $17.5 billion,' the authority said.
