HKers should carefully manage interest rate risks amid rate uncertainties: HKMA

Hongkongers should carefully manage interest rate risks when making decisions about property purchase, investment or borrowing amid an uncertain path of US monetary policy, the city’s de facto central bank warned. 

While the US Federal Reserve keeping the interest rate unchanged at 3.5-3.75 percent was in line with market expectations, future adjustments will depend on developments in US inflation and labour market, especially as oil prices have remained elevated amid continued tensions in the Middle East region, with the impact on US inflation still to be observed, the Hong Kong Monetary Authority said.

Under the peg system, Hong Kong dollar interbank rates generally track the US dollar counterparts, while shorter-tenor interbank rates tend to be also influenced by the supply and demand of the local currency funding in the local market such as seasonal factors and capital market activities, it said. 

The future trend of US interest rates is quite uncertain, which may influence the interest rate environment in Hong Kong, it added.

 

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