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 US counterpart, as it did yesterday by raising its base rate 0.25% to 3.5%. But banks ignored the Authority's lead once again - they have bucked three of this year's four. But this is the...
