Hong Kong interbank rates fell on Thursday after the U.S. Federal Reserve slashed its benchmark interest rate by 50 basis points and Hong Kong’s central bank followed suit.

The one-month Hong Kong interbank offered rate (Hibor) was fixed at 2.44786 percent on Thursday morning, down from 2.88714 percent on Wednesday and its lowest level since Sept. 17.

The three-month Hibor was fixed at 3.39286 percent, falling from 3.54071 percent on Wednesday but is now only at its lowest level since last Friday.

Analysts said the drop in interbank rates might make Hong Kong banks more likely to cut their prime lending rates. They were due to announce interest rate decisions later on Thursday.

Hong Kong officially tracks U.S. interest rate moves because its currency is pegged to the U.S. dollar but local banks have some leeway to lag U.S. moves.

China cut interest rates on Wednesday and Taiwan’s central bank followed on Thursday, joining efforts by the Fed and other central banks around the world in cushioning the economic fallout from the global financial crisis.

Source: http://www.afxnews.com

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