Local banks lower rates following Fed cut
Banking giant HSBC on Thursday said it was cutting its best lending rate in Hong Kong by 25 basis points to 5.625 percent from 5.875 percent effective September 20. Bank of China (Hong Kong) and Standard Chartered also said they were lowering their lending and Hong Kong dollar deposit rates by a quarter of a percentage point, with their cuts effective on Monday. Earlier on Thursday, the Hong Kong Monetary Authority cut the rate to 5.25 percent, hours after a rate cut of the same magnitude by the US Federal Reserve.  Mackie Lau, the co-head of treasury markets at Standard Chartered, said he expects the Fed to cut US rates by another half a percentage point in November. However, he said Hong Kong probably won't see much benefit until next year. "In terms of the real economy, it's hard to see any real tangible impact initially, because after all, they are only cutting 50 basis points. I guess the real question is: if the Fed will continue with this momentum, and if they will continue to cut?" "Going into the next year, by the time they bring rate to a more neutral level, then I think the real impact coming from rate cuts will eventually filter through the system." Homeowners and potential property buyers are hoping the rate cut will boost the local market. But Hannah Jeong, the head of valuation and advisory services at CBRE, said while the cut would boost transactions, it would not affect housing prices much.  "We're having a large number of unsold units until now. Also, there are a large number of supply in the pipeline coming from different developers," she told RTHK. "So, the housing price will still need to face [a] downward adjustment, possibly till next year, despite the interest rate cut [helping] buyers to be more active. So, we expect there will be more transactions, but the housing price will remain low at this moment." (Additional reporting by Reuters)_____________________________
Last updated: 2024-09-19 HKT 19:00 