{"id":21727,"date":"2025-08-25T07:50:09","date_gmt":"2025-08-25T07:50:09","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/21727\/"},"modified":"2025-08-25T07:50:09","modified_gmt":"2025-08-25T07:50:09","slug":"hong-kongs-dollar-peg-defense-leaves-bittersweet-taste-for-borrowers-as-hibor-rises","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/21727\/","title":{"rendered":"Hong Kong\u2019s dollar-peg defense leaves bittersweet taste for borrowers as Hibor rises"},"content":{"rendered":"

A \u201clow-rate honeymoon\u201d for Hong Kong borrowers has come to an end with an increase in the interest rate banks use to set loan prices, a mixed blessing that drives away carry traders but threatens a property market<\/a> recovery and discourages corporate borrowing, according to analysts.The Hong Kong Monetary Authority<\/a> intervened 12 times in the currency market over the past two months, successfully defending the local currency\u2019s peg to the US dollar by buying HK$119.95 billion and selling US$15.28 billion between June 25 and August 13.<\/p>\n

However, these interventions mopped up excess liquidity in the banking sector, prodding up the Hong Kong interbank offered rate (Hibor), which will put more pressure on borrowers whose loans are based on the rate.<\/p>\n

\u201cThe higher Hibor rate will definitely have a negative impact on the investment market and property trading,\u201d said independent analyst Jasper Lo.<\/p>\n

Hong Kong\u2019s currency has been pegged to the US dollar since 1983 at a fixed exchange rate of HK$7.80 per US dollar. In 2005, the HKMA established a narrow trading band, allowing the Hong Kong dollar to fluctuate between HK$7.75 and HK$7.85. When the local currency\u2019s exchange rate nears either end of that range, the HKMA buys or sells currency to alter the supply-demand equation and reel it back in.<\/p>\n

The HKMA\u2019s 12 recent interventions reduced the aggregate balance, a measure of banking-sector liquidity, by 69 per cent to HK$53.72 billion as of August 14 from a recent peak of HK$174 billion in May.<\/p>\n","protected":false},"excerpt":{"rendered":"A \u201clow-rate honeymoon\u201d for Hong Kong borrowers has come to an end with an increase in the interest…\n","protected":false},"author":2,"featured_media":21728,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[18633,79,18644,179,18,18642,18639,18641,4202,18640,18636,19,17,18643,18637,18635,18638,18634,2708,16332],"class_list":{"0":"post-21727","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-bank-of-east-asia","9":"tag-business","10":"tag-dbs-bank","11":"tag-economy","12":"tag-eire","13":"tag-eric-tso-tak-ming","14":"tag-hibor","15":"tag-hkma","16":"tag-hong-kong","17":"tag-hong-kong-dollar","18":"tag-hong-kong-monetary-authority","19":"tag-ie","20":"tag-ireland","21":"tag-jasper-lo","22":"tag-mreferral","23":"tag-ryan-lam-chun-wang","24":"tag-samuel-tse","25":"tag-shanghai-commercial-bank","26":"tag-us-dollar","27":"tag-us-federal-reserve"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/21727","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=21727"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/21727\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/21728"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=21727"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=21727"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=21727"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}