Hong Kong’s three note-issuing banks will cut their prime rates by 0.125 percentage points for the first time this year, following an interest rate cut by the US Federal Reserve.
The Hongkong and Shanghai Banking Corporation and BOC Hong Kong (2388) will trim the rates to 5.125 percent from 5.25 percent, the first cut since December last year.
Standard Chartered Hong Kong will also lower the rate by 0.125 percentage points to 5.375 percent.
The rate for their Hong Kong dollar savings deposits will also decrease by 0.125 percentage points to 0.125 percent after the adjustments.
HSBC's cuts will take effect on Friday, while those of the other two will be effective on Monday.
HSBC Hong Kong chief Luanne Lim Hui-hung said the cut is appropriate considering the US rates decision and the local market conditions, and that the lender will continue to monitor the external environment and local economic outlook, and adopt an agile approach when evaluating future rate decisions
The capped mortgage rate will also be lowered to 3.375 percent, down from 3.5 percent earlier.
For a homeowner with a 30-year mortgage of HK$4.5 million, monthly repayments will drop by HK$313, or 1.5 percent at the capped mortgage rate, Centaline Mortgage said.
One more cut of 0.125 percentage points is on the horizon this year if more cuts are delivered in the US, which will put an end to the rate cut cycle in Hong Kong, the company said.
The Hong Kong Monetary Authority chief executive, Eddie Yue Wai-man, earlier said a cut in interest rate could help ease the debt for individuals and businesses, bringing favorable effects to the economy and property market.
The de facto central bank lowered the base interest rate by 25 basis points in lockstep with the US Federal Reserve.
