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HONG KONG, Oct 23 (Reuters) - Hong Kong's central bank, the Hong Kong Monetary Authority, intervened for a third time on Friday, selling HK$3.1 billion ($400 million) for U.S. dollars in late afternoon to keep an appreciating Hong Kong dollar within its fixed trading band.
The move brought the total interventions for the day to HK$9.688 billion as of 0855 GMT, including two earlier injections of HK$3.488 billion and HK$3.1 billion as the currency repeatedly hit the top of its trading band at 7.7500 to the U.S. dollar.
The city has been attracting fund inflows as its currency peg to a weak U.S. dollar makes Hong Kong assets appealing while Hong Kong-listed shares of mainland Chinese companies have been supported by expectations that economic recovery in China could prompt further appreciation of the yuan, dealers said.
According to Reuters data, the latest intervention will lift the aggregate balance -- the sum of balances on clearing accounts maintained by banks with the HKMA -- to HK$235.602 billion by Oct. 28, approaching the all-time high of HK$257 billion set in May.
The Hong Kong dollar is pegged at 7.80 to the U.S. dollar but can trade between 7.75 and 7.85.
Under the linked exchange rate mechanism, the HKMA is usually obliged to intervene in the market to keep the trading band intact if the currency hits 7.75 or 7.85.
At 0858 GMT, it was quoted at 7.7500/01. (Reporting by Christina Lo; Editing by Jan Dahinten)