Three-Month HIBOR Tops 2% for First Time Since 2008 Global Financial Crisis

Three-Month HIBOR Tops 2% for First Time Since 2008 Global Financial Crisis

Liao Shumin

Date: Wed, 06/13/2018 - 23:00 / source:Yicai
Three-Month HIBOR Tops 2% for First Time Since 2008 Global Financial Crisis
Three-Month HIBOR Tops 2% for First Time Since 2008 Global Financial Crisis

(Yicai Global) June 13 -- The three-month Hong Kong Interbank Offered Rate, HIBOR, jumped to its highest point in 10 years today following the market reaction to a number of factors including upcoming company initial public offerings, tighter capital conditions and demand for funds.

The three-month interbank offered rate rose beyond 2 percent mark, for the first time since the 2008 global financial crisis, according to the quotes announced by the Hong Kong Association of Banks today.

The one-month HIBOR soared 90 basis points to 1.57696 percent compared with 0.67 percent in early March this year, and the three-month rate moved up 98 basis points to 2.00608 percent compared with 1.02 percent in March.

GF Securities analysis report shows that Both short-term and long-term factors have raised the interest rates in Hong Kong markets, said a report released by GF Securities. The Fed is expected to raise interest rates this month, and some individuals and institutional investors are preparing for Xiaomi IPO in mid-July, which leads to tighter capital conditions in Hong Kong. In addition, financing costs of the Chinese mainland firms increase against the backdrop of nationwide deleveraging, and they issue bonds to finance in Hong Kong, which boosts the demand for funds in the market.

The Fed holds the Federal Open Market Committee, FOMC, meeting, and is expected to announce the interest rate decision today. The 30-day Fed fund futures indicate a 90 percent chance of a rate hike this month. 

An increase of 25 basis points will raise Libor benchmark rate directly. The Hong Kong dollar is officially linked to the greenback at the rate of HKD7.75 (strong-side convertibility undertaking) to HKD7.85 (weak-side convertibility undertaking) per dollar. Therefore, the Libor's rise is expected to keep pushing up HIBOR.

Editor: Mevlut Katik

Follow Yicai Global on

Keywords: Hibor, Hong Kong Dollar, Fund, Demand, Federal Reserve, Interest rate, hike