Hong Kong’s major lenders kept their prime rates unchanged on Thursday, after the US Federal Reserve raised the interest rate for the first time in three years overnight.
The Hongkong and Shanghai Banking Corporation, BOC Hong Kong (2388) and Hang Seng Bank maintained their best lending rates at 5 percent, while the rate of Standard Chartered Bank (Hong Kong) also stayed the same at 5.25 percent.
The lenders’ Hong Kong dollar savings deposits remained unchanged.
The city's prime rates have been at current levels since October last year, when local banks trimmed them by 0.125 percentage points, cutting back all hikes since the US raised interest rates in 2022.
The Hong Kong interbank offered rates were mixed on Thursday, with the mortgage-linked one-month Hibor inching down 5 basis points to 2.9 percent.
The Fed lifted its interest rate by 0.25 percentage points and signaled one more hike in the coming months.
The Hong Kong Monetary Authority also raised the base interest rate for the discount window to 4.25 percent.
The de facto central bank’s chief executive Eddie Yue Wai-man said a widening interest rate gap between Hong Kong and the United States may lead to more carry trade activities, pushing the local currency toward the weak end of its 7.75-7.85 trading band.
The outlook for the Hong Kong dollar and interbank rates can vary due to various factors, particularly the interest rate differential, the supply-demand conditions for Hong Kong dollars driven by, for example, capital market activities and other seasonal factors, Yue said.
The public should carefully manage interest rate risks when making financial decisions, he added.
