Nov. 14 (Bloomberg) -- Money-market rates rose in Asia as cooling Chinese investment, U.S. unemployment at a 25-year high and a recession in Germany intensified concern the financial crisis will sap global economic growth.

The Hong Kong three-month interbank offered rate, or Hibor, rose 5 basis points to 2.19 percent, climbing for the second day and paring its decline for the week. Singapore's three-month rate for U.S. dollar loans, Sibor, increased for the first time since Oct. 13, adding 10 basis points to 2.23 percent.

Banks in Asia remain reluctant to expand lending on signs the financial crisis is spreading through the global economy. Hong Kong's economic growth probably slumped to the weakest pace since a disease epidemic in 2003, as the global financial crisis cut exports and spending cooled.

``Financial conditions have tightened in the region, led by a widening in credit spreads, tougher loan conditionality as well as the equity market sell-off,'' according to Goldman Sachs Group Inc. analysts Mark Tan and Michael Buchanan, in a report today from Hong Kong.

The London interbank offered rate, or Libor, for three- month U.S. dollar loans increased almost 2 basis points to 2.15 percent yesterday, the first advance since Oct. 10. A basis point is 0.01 percentage point.

South Korea's one-year rate to swap won loans for dollars plunged to a record minus 0.4 percent, indicating banks are starved of dollars even after government stimulus plans and the provision of $30 billion from the Federal Reserve. That's only the 11th time this decade the cross-currency swap rate, a gauge of the availability of dollar funding, has dropped below zero. The measure averaged 3.3 percent this year before Sept. 15.

Hong Kong

Three-month Hibor has fallen 4.7 basis points since Nov. 7, after dropping by 1.11 percentage points the previous week. It reached this year's high of 4.44 percent on Oct. 13.

``We need to look at the trend in all of these, and the trend in all of these is lower,'' said Patrick Bennett, Asian currency and fixed-income strategist in Hong Kong at Societe Generale SA. ``The trend is lower going forward because central banks around the planet will continue to do all that is necessary, that is, providing ample liquidity.''

The Hong Kong Monetary Authority has injected HK$44.2 billion ($5.7 billion) into the banking system since Lehman Brothers Holdings Inc. filed for bankruptcy on Sept. 15 to help maintain the currency peg. The funds helped lower short-term lending rates between banks, Yam said yesterday in his weekly statement on the HKMA's Web site.

Strong Demand

``The strong demand for Hong Kong dollars was probably due to repatriation of funds and unwinding of interest carry trades as global financial jitters led market participants to deleverage and reduce their exposure to risk,'' Yam said. Policy makers will ``take further measures if necessary,'' he said.

Gross domestic product rose 2.6 percent in the third quarter from a year earlier, according to the median estimate of 16 economists surveyed by Bloomberg News, after gaining 4.2 percent in the previous three months. The government will release the figures at 4:30 p.m. today.

Fixed-asset investment in China's urban areas rose 27.2 percent in the first 10 months from a year earlier, the statistics bureau said today. That was less than the 27.6 percent gain through September. The number of U.S. workers receiving unemployment benefits climbed to 3.9 million in the week ended Nov. 1, the Labor Department said yesterday.

Australia

The rate Australian banks charge each other for three-month loans fell 0.2 basis point to 4.75 percent, the smallest decline in 11 days. The yield dropped 24 basis points this week after falling 82 points in the five days ended Nov. 7.

The difference between the Australian three-month bank bill yield and the overnight indexed swap rate, a measure of funding availability, was little changed at 43 basis points, close to the narrowest since Lehman Brothers collapsed. The measure fell 6.8 basis points since Nov. 7, the smallest decline in three weeks.

Australia's central bank pumped A$1.46 billion ($972 million) into money markets today after estimating the shortfall would be A$1.7 billion. The country's banks increased deposits held at the Reserve Bank of Australia by A$417 million to A$4.74 billion yesterday, the central bank said on its Web site.

The central bank said it bought its own currency for a second straight day to ``add liquidity to the market.''

Japan

Japan's money-market rates are likely to fall as the Bank of Japan starts to pay interest on reserves that lenders deposit at the central bank, according to Tatsuo Ichikawa, a senior strategist in Tokyo at RBS Securities Japan Ltd.

The BOJ said last month it will start paying 0.1 percent interest on banks' reserves, encouraging finance companies to lend excess cash to the central bank. The interest payments will also stop the overnight lending rate falling below 0.1 percent, allowing for the increased provisions of liquidity. The BOJ's target rate is 0.30 percent.

``The BOJ has given a sign that it is going to provide massive liquidity from next week,'' Ichikawa said. It is like quantitative easing, without having to lower the overnight lending rate, he said.

Japan's overnight call loan rate was at 0.24 percent as of 3:41 p.m. in Tokyo, from 0.315 percent yesterday, according to broker Tokyo Tanshi Co.

Libor-OIS Spread

Money rates declined from last month's peak as central banks cut borrowing costs and provided unlimited dollar funding and governments offered bailouts and guarantees to financial institutions. Credit markets froze after Lehman Brothers filed for bankruptcy on Sept. 15.

Libor, the benchmark for $360 trillion of financial products worldwide, is set by a panel of banks in a daily survey by the British Bankers' Association before noon in London.

The Libor-OIS spread, which former Fed Chairman Alan Greenspan said in June should serve as a measure for determining when markets have returned to normal, was at 162 basis points yesterday. The spread measures the difference between the rate banks charge for three-month dollar loans relative to the overnight indexed swap rate.

The difference compares with 87 basis points on the last trading day before Lehman declared bankruptcy, and an average of 11 basis points in the five years before the onset of the financial crisis.

To contact the reporters on this story: Bob Chen in Hong Kong at bchen45@bloomberg.net.

Last Updated: November 14, 2008 02:38 EST