NEW YORK (Reuters) - U.S. money market fund assets posted their steepest weekly drop since April as the third quarter began with Britain's vote to leave the European Union in the rear view mirror, the Money Fund Report said on Wednesday.

Money fund assets fell by $25.77 billion to $2.682 trillion in the week ended July 5, more than reversing the prior week's inflows of $18.02 billion, according to the report, published by iMoneyNet.

The week's outflows were the most since the week ended April 19, when there were $34.55 billion in withdrawals to meet personal and corporate tax payments.

Taxable money market fund assets decreased by $24.83 billion to $2.488 trillion led by a $23.94 billion drop among prime institutional funds, while tax-free assets decreased by $945.10 million to $193.96 billion.

The iMoneyNet Money Fund Average 7-Day Simple Yield for All Taxable money-market funds held steady at 0.12 percent.

The iMoneyNet Money Fund Average 7-Day Simple Yield for All Tax-Free and Municipal money-market funds was unchanged at 0.07 percent.

(Reporting by Richard Leong; Editing by Diane Craft)