A quintet of banks is offering promotional interest rates to encourage deposits of Hong Kong dollars and whet the Hong Kong Monetary Authority's appetite for the local currency, Hong Kong's The Standard reported Sunday.

The de facto central bank intervened in the market three times last week to defend the local currency amid dwindling interbank liquidity.

The operations were due to lower the aggregate balance, a key gauge of banking system liquidity, to HK$114.54 billion on Monday, July 7.

Among the banks offering time deposit rates of over 5% were ZA Bank, Fusion Bank, and China Construction Bank (Asia), the report said.

HKMA Chief Executive Eddie Yue warned earlier that persistent outflows could continue to pressure the Hong Kong dollar, citing weaker demand from dividend payouts, IPO repatriation, and the completion of half-year funding.

Hong Kong adopted its US dollar peg in 1983, initially at HK$7.80. In 2005, the HKMA introduced a narrow trading band between HK$7.75 and HK$7.85, requiring it to intervene when the currency approaches either end of the range.

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