The Hong Kong dollar eased to a one-week low against the US dollar on Tuesday, while most money market rates fell for a second day as major market participants continued to offer liquidity.
The local currency weakened to 7.7547 per US dollar before trading back to 7.7543/45, down from 7.7526/29 in late Asian trade on Monday.
Dealers said a major lender and the Hong Kong Monetary Authority, the territory's de facto central bank, had released short-term liquidity into the money market, which had pushed interest rates down across the board.
A trader from a Japanese bank said the central bank had been adding liquidity to the market in recent sessions.
"It lent out two- and three-week money yesterday and offered one-week funds today," the trader said.
Dealers suggested that the move by the central bank was to ease the pressure after recent sharp interest rate rises by local banks.