As the controversial extradition bill continues to divide Hong Kong politically, the city’s finance sector is bracing for any impact from the current political unrest.

Interest rates in Hong Kong have dropped as funds continue to be withdrawn and the Hong Kong dollar dropped to 7.83 against the US dollar as well.

Kyle Bass, the founder of Hayman Capital, said the signs of capital outflow, as well as political factors, have affected the stability of the currency. However, the local financial sector disagreed. Financial secretary Paul Chan stated that no major capital outflow has been triggered by these factors.

Bass predicts that enterprises will no longer be interested in investing or planning for the long term in the city. They will be figuring out how to retreat from the city as wealthy residents, white-collar professionals and even the working class find ways to emigrate overseas.

He also said that “educated people are reading the post-its on all the Lennon walls,” and the Hong Kong dollar will continue to decline in value.

John Tan, the managing director of Standard Chartered Asia Pacific disagreed with Bass, saying he did not see any signs of capital outflow. He pointed out that political risks such as the extradition bill are highly unlikely to affect the finance sector.

It is hard for outsiders to estimate changes in fund positions, said Tan, who reiterated that the city’s fiscal reserves remain strong. He believes that no matter what happens, Beijing would not allow Hong Kong to be hit with great fluctuations.