A number of smaller banks in Hong Kong are raising their time deposits' interest rates to up to 2.5 percent for a three-month tenor to attract funds amid the higher expectation of an interest rate cut by the United States’ Federal Reserve.
The 2.5 percent interest rate, offered by China Construction Bank (Asia), is the highest among Hong Kong dollar-settled three-month deposits, but comes with a minimum investment of HK$3 million.
New clients of CCB Asia, however, can enjoy a 6.88 percent interest rate for a HK$10,000 three-month deposit under a designated scheme. The offer is available until August 31.
For a six-month tenor, WeLab Bank provides 2.2 percent per annum, exceeding all lenders, while PAObank takes the top spot for 12-month deposits by setting its interest rate at 2.4 percent.
Meanwhile, Mox Bank also raised the rates for 36- and 48-month maturities to 2.8 percent.
These increases came after Hong Kong’s interbank borrowing costs rallied significantly last week, with the three-month Hong Kong Interbank Offered Rate marching by 1 percentage point to 2.83738 percent last Friday from one week prior.
However, the US’s central bank chair Jerome Powell is softening his tone about interest rate cuts, saying last Friday that the Fed “returned to a framework of flexible inflation targeting.” The shift fueled market bets on a 25-basis-point cut in September.
STAFF REPORTER
