Hong Kong five-hundred, one-hundred and twenty-dollar banknotes are arranged for a photograph in Hong Kong on April 23, 2020. (PAUL YEUNG / BLOOMBERG)

The Hong Kong dollar moved away from the strong end of its trading band for the first time since Ant Group Co’s initial public offering was mooted two months ago.

The Hong Kong dollar declined as much 0.05 percent, the most since June 16, to 7.7537 versus the greenback

The currency declined as much 0.05 percent, the most since June 16, to 7.7537 versus the greenback. It pared the drop to 7.7517 as of 3:32 pm in the city.

Ant has stopped taking orders from big investors after strong demand for its Hong Kong shares. The IPO had spurred inflows into the city in recent months, prompting repeated interventions from the Hong Kong Monetary Authority (HKMA) to stop the currency from strengthening past the limit of its band against the greenback.

ALSO READ: Hong Kong liquidity to hit record high ahead of Ant IPO

The local currency may weaken to 7.7550 after Ant starts trading, said Tommy Ong, managing director for treasury and markets at DBS Hong Kong Ltd. 

Large-scale capital flight is unlikely, said Ong, because demand for Ant’s shares and future listings by other Chinese mainland companies should support demand for the Hong Kong dollar, he said.

The local currency strength comes at a time when the city’s economy has been pummeled by the coronavirus pandemic. The unemployment rate has climbed to a 15-year high.

READ MORE: Record Hong Kong peg defense boosts liquidity to US$58 billion

The HKMA has sold a total of HK$383.5 billion (US$49.5 billion) of local dollars since April to defend its foreign-exchange peg. These moves have boosted the interbank liquidity pool to the largest level on record. 

The Hong Kong dollar’s one-week interbank lending rate known as Hibor fell 15 basis points, the most since August, to 0.48411 percent.