Federal Reserve Has Opportunities to Cut Interest Rates in Q4, Hong Kong Interbank Offered Rate (HIBOR) May Ease Pressure

Taiwan Financial News has learned that Cao De-ming, Chief Vice President of Jinge Luo Mortgage Brokerage, said that recently the Hong Kong dollar has continued to trigger the "weak side exchange guarantee", and the Hong Kong Monetary Authority purchased the Hong Kong dollar for the seventh time this morning. The banking system's total reserve will fall to HK$825.52 billion, making HIBOR continue to rise. Although HIBOR's trend is volatile, there is a chance that the Federal Reserve may cut interest rates for the first time in Q4, which could lead to capital inflows into the Hong Kong market and ease pressure on HIBOR; after the US "Big and Beautiful" law is passed, the market expects part of the funds will flow towards Asian markets, and Hong Kong banks may adjust their optimal interest rates according to their commercial strategies. If that happens, there will be opportunities for HIBOR to follow suit.

On July 31, HSBC announced that its optimal interest rate (P) remains unchanged. Cao De-ming said that Hong Kong banks have lowered their optimal interest rates three times last year, with a magnitude and speed exceeding market expectations. Banks took into account the US interest rate trend and funding costs without adjusting their optimal interest rates.

Today's one-month HIBOR report is 1.03%, and it is expected to challenge the 1.5% level. Cao De-ming pointed out that although HIBOR has risen to the 1% level, using the general H plan "H+1.3%" calculation, actual interest rates are 2.33%, which is still lower than the capped rate of 3.5% by 1.17%. For property owners currently under construction, as long as HIBOR remains below 2.2%, they can still be lower than the capped rate.