Local banks raise interest rates after latest US hike
Leading local banks HSBC, Hang Seng, Standard Chartered and Bank of China (Hong Kong) on Thursday announced higher interest rates after the latest rate hike by the US Federal Reserve. HSBC announced a second interest rate increase in more than a month and this time by a larger margin. From Friday, the bank's Hong Kong dollar best lending rate will go up by 25 basis points to 5.375 percent. It was raised by 12.5 basis points in late September.  Meanwhile, the bank will raise its savings rate for its Hong Kong dollar deposits by 25 basis points. It went up by 12.4 basis points, also in late September. “The one-month and three-month Hong Kong Interbank Offered Rates (Hibor) have continued to increase by more than 59 and 152 basis points since we raised our HK dollar best lending rate in September. In deciding the level of adjustment today, we have assessed the implications of recent economic reports, affordability for borrowers, and interest to depositors," said Luanne Lim, chief executive of HSBC Hong Kong. Hang Seng Bank announced similar rate increases. From Friday, its prime lending rate will go up by 25 basis points to 5.375 percent and its savings rate will be raised by 25 basis points. Higher rates will take effect at Standard Chartered from Monday. Its prime lending rate will go up by 25 basis points to 5.625 percent, and its savings rate will be raised by 12.5 basis points to 0.375 percent. Also from Monday, the prime lending rate at Bank of China (Hong Kong) will be raised by 25 basis points to 5.375 percent, and its savings rate will go up by 25 basis points to 0.375 percent. Meanwhile, the Hong Kong Monetary Authority (HKMA) on Thursday raised its base rate by 75 basis points to 4.25 percent with immediate effect according to a pre-set formula, in the wake of the US rate hike by a similar margin. The HKMA also warned the public about rising borrowing costs here. "Many banks have already raised their saving and lending rates, including the prime rates and the interest rate cap for newly approved mortgage loans. The public should be prepared for the commercial interest rates to rise further, and carefully assess and manage the relevant risks when making property purchase, mortgage or other borrowing decisions," HKMA chief executive Eddie Yue said in a statement. He also said it's normal for the Hong Kong dollar exchange rate to remain weak as the interest rate differentials between the local currency and the greenback widen. Financial Secretary Paul Chan said continuous US rate hikes will hit demand for Hong Kong exports. But he played down concerns about the city's economic growth after advance government estimates showed GDP shrank 4.5 per cent in the July-September quarter from a year ago. "The economic situation has been challenging. But if we are able to put Covid-19 under control... if we are able to continue to have travellings between Hong Kong and the rest of the world, that will provide added impetus to our economic growth," said Chan. The financial secretary also said a recent correction in property prices was expected and that there was no need to ease existing government curbs._____________________________
Last updated: 2022-11-03 HKT 18:22 