General News
Hong Kong’s largest commercial banks trimmed their prime lending rates for the first time in almost five years, as they reduced their funding costs to help local businesses and mortgage borrowers.
HSBC’s prime lending rate will fall by a quarter percentage point at 5.625 per cent starting on Friday, while its saving rate will be reduced by the same margin to 0.625 per cent per annum for deposits that exceed HK$5,000 (US$640), the bank said. Accounts with less than that amount earn no interest.
Bank of China (Hong Kong) reduced the loans rate for its best customers by the same margin to 5.625 per cent, effective September 23, according to a statement.
The HKMA today cut its base rate by 50 basis points in lockstep with the half-percentage point cut overnight by the US Federal Reserve. The move has an immediate effect on the Hong Kong-dollar interbank offered rate (Hibor), which is the cost of funding among the city’s banks.
“Our decision to reduce our Hong Kong dollar interest rates reflects both the US Federal Reserve’s announcement and the steady softening of Hibor since the beginning of this year,” HSBC’s Hong Kong chief executive Luanne Lim said in a statement. “Having considered the macroeconomic environment and Hibor trends, we concluded that a reduction is appropriate. We will continue to monitor the evolving macro-outlook and developments in the financial markets, ready to adjust our rates as needed”.
