It is a normal phenomenon that the Hong Kong interbank offered rates rebounded on higher demand for local currency as the half-year closing approaches and companies seek funds to pay out dividends, experts said.
The Hibor-linked mortgage plans, the most popular ones in the market, usually carry an interest rate of 1.3 percent plus the one-month Hibor.
That translates to a mortgage rate of 2.2 percent based on Wednesday’s figure – the one-month gauge rose by over 16 basis points to 0.90964 percent, the highest in more than one month.
As long as the one-month rate remains below 2.2 percent, homeowners with mortgage payments can still enjoy “low-interest times” by paying a rate lower than the capped interest rate, said Eric Tso Tak-ming, chief vice-president of mortgage broker mReferral.
Hibor trends are influenced by factors such as carry trades, capital market activities, and seasonal fluctuations, resulting in significant volatility, Tso said.
The Hibors rose across the board for the second day in a row on Wednesday.
The overnight rate inched up to 0.02071 percent, while the one-week Hibor climbed to an over-one-month high of 0.37988 percent.
The Hong Kong dollar continued to hover at 7.85 per greenback, the weak end of its trading band, as the record interest rate gap between the two currencies made it lucrative for carry trades.
Hong Kong Monetary Authority chief executive Eddie Yue Wai-man warned earlier this week that the de facto central bank may step in to defend the peg system by selling the greenback.
Such a move would reduce the aggregate balance of the banking system and likely push Hibor back up, said Ivy Wong Mei-fung, managing director of Centaline Mortgage Broker.
STAFF REPORTER
