Hong Kong's Exchange Fund could have improved its performance in the third quarter due to changes in the equity market, the city's Monetary Authority chief Norman Chan Tak-lam told reporters yesterday at the Treasury Markets Summit in Hong Kong. The Exchange Fund, which has the mandate of supporting the stability of the Hong Kong dollar under the oversight of the Hong Kong Monetary Authority (HKMA), is expected to announce its performance for the past quarter in November. Chan also said the US decision last month to release a third round of quantitative easing has not spiked hot money flows to Hong Kong, but could continue to pressure interest rates for banks. The government has a set of property price controlling measures on hand which could be put into effect when the timing is appropriate, said Chan. Hong Kong's property prices have spiked since 2008, when the US Federal Reserve launched its first round of quantitative easing measures to push liquidity into the economy. Chan said it is uncertain whether property prices will go up from here owing to the lingering crisis in the euro zone and the US fiscal cliff, which could increase tax and slash spending, causing a slowdown in growth in the world's largest economy. The HKMA will pay close attention to economic developments and push forward measures to counter slowdowns at the right time, said Chan. Hong Kong banks have been aggressive in taking yuan deposits recently, mainly because of better demand in yuan loans, said Chan. Yuan deposits in Hong Kong fell in August after a gradual increase over four months. But the currency hit a new closing high yesterday against the dollar, as China's central bank set the midpoint slightly stronger for the second consecutive day, indicating more tolerance for mild yuan appreciation. The yuan has reversed the trend of depreciation against the dollar since the middle of last month, partly because of the monetary easing in the US. But one Standard Chartered economist said conditions do not remain ripe for the yuan to appreciate drastically this year. Senior economist Kelvin Lau expects the yuan to gain more momentum next year with the US dollar/yuan spot rate reaching 6.19 at the end of 2013.