HK banks to raise prime leading rate first time in 4 years

Five major banks in Hong Kong announced their prime lending rate raised to 5.125 percent from 5 percent, following the interest rate hike earlier in the day by the Hong Kong Monetary Authority.

This is the first time in four years that the major Hong Kong banks, namely HSBC, Standard Chartered, Bank of China (Hong Kong), Hang Seng Bank, Bank of East Asia to raise its prime leading rate.

They also decided to raise their savings interest rate to 0.125 percent from 0.01 percent. Both interest rate changes are effective from Thursday.

Meanwhile, Bank of China (Hong Kong) said the daily account balance at 200,000 HK dollars (25,600 US dollars) will enjoy an additional bonus rate of 0.05 percent. HSBC offers 0.1 percent bonus interest rate up from 0.02 percent for balances of 1 million HK dollars (128,000 US dollars) and above.

Following the overnight interest rate hike by the US Federal Reserve, the Hong Kong Monetary Authority raised its base rate by a quarter percentage point to 3.25 percent Wednesday.

Hong Kong pegs its currency to the US dollar, so the Hong Kong Monetary Authority generally matches interest rate adjustments by the US Federal Reserve. However, local banks are free to set savings and lending rates as they choose. Hong Kong banks had kept their prime lending rate at 5 percent unchanged, despite US interest rate hikes earlier this year.

Source: Xinhua