Hong Kong dollar three-month interest rate has been more than a decade high. HSBC: After the end of the year or fall back
Recently, Hong Kong’s liquidity has gradually tightened, and the Hong Kong dollar interest rate has risen sharply. According to the treasury market information, the one-month interbank interest rate (HIBOR), which is closely related to the mortgage interest rate, has risen. On the 10th, it rose to about 2.18% yesterday. The 3-month interest rate rose to 2.29%, a record high of more than 10 years.
HSBC (005) Bank Asia-Pacific Consultant Liang Zhaoji attended the “Hong Kong Economic Summit 2019” yesterday and responded to the recovery of the interest rate. The Hong Kong dollar interest rate hike was mainly due to the annual and seasonal factors, which led to a large demand for bank funds. After the end of the year, the interest rate will slowly fall back.
As for the Fed to raise interest rates next week, will Hong Kong follow the interest rate hike? He thinks that the chance of a rate hike in the United States is higher than 70%. However, it is still unknown whether Hong Kong follows it. He also pointed out that Hong Kong does not have full conditions to raise interest rates. It depends on a number of factors, such as local funding and competition in the industry.
Hong Kong does not have full interest rate hike conditions
The year is approaching, and the market is watching the Fed’s rate hike next year. Liang Zhaoji believes that the market sentiment has changed significantly in the past. In the past, the market and Fed members are expected to raise interest rates by 3-4 times next year. However, it has been reduced to one or two times. There is even information that will cut interest rates in 2020.
He continued to point out that the recent US Treasury yield curve has been upside down, causing the market to worry about the US economic recession. However, he said that the current global economy is more affected by political factors, and it is difficult to predict whether the US will respond to interest rate cuts next year.
Affected by the global economic climate, Hong Kong’s economic growth rate has slowed this year. The government’s latest economic growth forecast is 3.2%. The Chief Executive, Mrs Carrie Lam, gave a speech at the “Hong Kong Economic Summit 2019” yesterday. Although the economic situation has reversed this year and the market may not have a good life, she appeals to the public not to be discouraged. The Hong Kong Government will continue to consolidate and enhance Hong Kong’s traditional and new industries. Grasp the development opportunities in Dawan District and actively integrate into the overall development of the country. Liang Zhaoji is also worried that Hong Kong’s economic growth next year will be lower than this year. However, it is actually a matter of trade war.
Global economic growth slows down
On the other hand, the mainland and China-US trade war started this year, and the market is worried about the impact on the mainland economy. Qiao Hong, chief economist of Bank of America Merrill Lynch Greater China, predicts that the central government will lower its economic growth target from 6.6% this year to around 6% next year. She continued that the impact of Sino-US trade friction on the mainland this year is not obvious. The slowdown in growth was mainly due to the tightening of the financing environment.
She expects that the mainland authorities will gradually introduce policies to support the economy, offset some of the effects of trade wars, such as monetary easing and relaxation of credit restrictions. In addition, more tax cuts, including household income and value-added tax, will be introduced, while infrastructure investment and real estate control measures will be eliminated. As for the global economy, Bank of America Merrill Lynch forecasts will be revised down from 3.8% this year to 3.6% next year.