The Hong Kong dollar interbank interest rates have all fallen significantly, with the overnight interest rate dropping back below 4%.

On March 1st, Hong Kong dollar interest rates almost all fell. The overnight rate dropped sharply by 103 basis points to 3.93417%; the rate related to mortgages fell to 4.46917%; the three-month interbank rate reflecting the cost of bank funds dropped to 4.68315%, hitting a new low in over a week, with a spread of 92 basis points compared to the US dollar LIBOR rate. For longer-term rates, the six-month rate fell to 4.68857%, while the one-year rate remained at 4.76571%. The Hong Kong dollar exchange rate hit a low of 7.8298 against the US dollar in intraday trading, the lowest since October 19 last year. US inflation data met expectations, raising the possibility of a rate cut by the Fed in June, leading to a decline in the US dollar exchange rate. The Hong Kong dollar fluctuated between 7.8278 and 7.8298 this morning, with the latest rate at 7.8279, up 0.01% from the previous close. On February 29th, the US announced that the January Personal Consumption Expenditures (PCE) price index rose by 0.3% monthly and 2.4% annually, while the core PCE price index rose by 0.4% monthly and 2.8% annually, all in line with expectations. Hong Kong stocks initially fell before rising, with the Hang Seng Index opening 120 points lower and dropping by up to 190 points before rebounding, rising by up to 140 points to 16651. The latest increase is 80 points.