Local money market rates continued to rise yesterday amid fears short-term interbank liquidity would shrink after similar falls last week. The Hong Kong Monetary Authority yesterday announced the aggregate balance at the Liquidity Adjustment Facility had dropped by $346 million to $4.68 billion. Fuelled by speculation ahead of the authority's announcement, the overnight rate shot up to 6.75 per cent before closing at 4.25 per cent. The one-week rate gained one percentage point to 7.25 per cent while the one-month rate edged up 0.563 percentage point to finish at 7.563 per cent. Higher rates boosted the Hong Kong dollar spot exchange rate to $7.7475 per US dollar, against Monday's $7.749. Without giving further details, an authority spokesman said the reduction in the aggregate balance was prompted by the outflow of funds under the currency board system. A trader said the shrinkage in liquidity reflected a couple of US dollar buying orders made last Thursday and settled yesterday at the $7.75 level - a point which is believed to trigger action from the authority. It was difficult to conclude if the buying was generated by genuine commercial demand or from speculators, he said. He believed the market had more or less found a short-term equilibrium for the Hong Kong dollar at the $7.74 level, implying it would be unnecessary for the authority to act further to boost the local currency.