The Hong Kong Monetary Authority (HKMA) said on Monday that no significant outflows from the Hong Kong dollar or the banking system were observed during the past six months ending February.

With the Hong Kong dollar remained firm, the aggregate balance was stable and total deposits grew modestly, the HKMA said in a half-yearly report.

Despite uncertainties in the external and internal environment, both Hong Kong foreign exchange and money markets continued to operate in a smooth and orderly manner, the HKMA added.

The remarks came as the COVID-19 outbreak posed significant challenges to the global economy and led to prolonged volatility in global financial markets despite stimulus measures by central banks.

While reiterating Hong Kong's stable position, the HKMA admitted that the banking sector will be challenged by a number of downside risks arising from the uncertainties over extent of the pandemic, trade relations between major economies and local social incidents, among others, in the rest of the year.

The HKMA also said Hong Kong, as the offshore Chinese currency renminbi business center, still saw a stable renminbi liquidity pool over the past months.

The total outstanding amount of renminbi customer deposits and certificates of deposit increasing to 637.4 billion yuan (about 90 billion U.S. dollars) at the end of January 2020. The average daily turnover of the renminbi real-time gross settlement system stayed high at 1.13 trillion yuan for the whole of 2019.

Despite external uncertainties, Hong Kong's offshore renminbi business will benefit from the liberalization of the Chinese mainland's capital account, more allocation into renminbi assets by international investors, and deepened regional economic and financial cooperation under the Belt and Road Initiative and the Guangdong-Hong Kong-Macao Greater Bay Area development, the HKMA said.

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