Interesting times in HK

The Fed raises interest rates, Hong Kong banks lower them.

So much for rising interest rates. Despite the US Federal Reserve's quarter-point hike on Wednesday night Hong Kong banks actually lowered their prime lending rate by 0.125% yesterday. That means the spread between US and Hong Kong prime rates just widened by 37.5 basis points.

The lower rates are not just a move against the Fed. Because of the Hong Kong dollar's peg to the US dollar the HKMA tends to stay in lockstep with its...

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