Hong Kong Interbank Rate

The three-month Hong Kong interbank offered rate (Hibor), the benchmark borrowing costs, rose 8 bps to an over two-year high of 1.43% on Tuesday, the highest since May 5, 2020, from 1.35% on Monday, as liquidity continued to ease after the authorities bought the local currency and the Hong Kong Monetary Authority followed the Federal Reserve’s footsteps in raising interest rates last week. Reuters reported early Tuesday that the city’s central bank had bought HK$ 5.22 billion ($664.9 million) from the market in New York trading hours to stop local currency from further weakening. Local media reports quoting HKMA's chief executive Eddie Yue said that the central bank may accelerate purchases of the local currency until the city’s interest rates approach the US level. Monetary policy in the financial hub moves in lockstep with the Fed given the Hong Kong dollar’s peg with the US currency.