HKMA chief executive Norman Chan Tak-lam. Photo: RTHK

Large-scale capital outflows have not yet been seen after protests broke out across different districts in Hong Kong, according to the Hong Kong Monetary Authority (HKMA).

It is natural for capital to come in and out of Hong Kong as the city is an international financial center, HKMA chief executive Norman Chan Tak-lam said on Monday after attending an event.

The HKMA has not yet seen any evidence of a large number of private banking clients moving their money out of Hong Kong, but there has been a rising number of inquiries about how to open overseas accounts, Chan said.

Commenting about home prices, Chan said property prices had only declined by about 3% over the past few months due to the social unrest. He said the HKMA would only cancel the measures that were launched several years ago to help stabilize the property market if the market entered a downward cycle.

The Centa-City Leading Index, compiled by the Centaline Property Agency to reflect secondary private home prices, decreased 1.73% to 184.96 for the week ended September 8 from one month earlier. The sub-indices dropped 1.02% on Hong Kong Island, 2.1% in Kowloon, 2.2% in New Territories West and 2.32% in New Territories East.

The index fell to 31.7 in July 2003 from 100 in July 1997 after Hong Kong was handed over from the British to the Chinese government. But it has risen by 483% over the past 16 years, with the index at 184.96 on September 13.

Between 2009 and 2016, the HKMA launched a series of measures to try to prevent the property markets from overheating. The measures included a tightening of mortgage rules, a buyer’s stamp duty for non-permanent-resident purchasers, and a special stamp duty for those who sell their apartment within two years.

Read: HK property prices down 3-5% on protests, trade war

Read: Court battles may delay HK farmland buy-up

On September 6, Fitch Ratings downgraded Hong Kong’s long-term foreign-currency issuer default rating (IDR) to “AA” from “AA+” with a “negative” outlook. It said months of persistent conflict and violence were testing the “one country, two systems” framework that governs Hong Kong’s relationship with the mainland, as mainland officials take a more public stance on Hong Kong affairs than at any time since the 1997 handover.

The downgrade of Hong Kong’s rating will have some negative impacts but they will be small, Chan said, adding that most debt issuers in Hong Kong have high credit quality. It will not affect Hong Kong’s status as a fundraising center for corporates, he said.

Read: Fitch downgrades Hong Kong as rallies drag on

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