Hong Kong Interbank Rate Jumps as HKMA Defense Hits $4.3 Billion
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The Hong Kong dollar’s interbank borrowing costs rose to their highest level this year, as the city’s de facto central bank bought more of the currency to defend its peg to the greenback.
The three-month interbank rate -- known as Hibor -- climbed for a fourth day to reach 1.32 percent, the highest since Dec. 27, as the Hong Kong Monetary Authority took its buying of the local dollar since last week to HK$33.7 billion ($4.3 billion). More than half of the purchases have taken place within the past two days. The gap between Hibor and the interest rate on the greenback stayed around one percentage point, which still makes shorting the Hong Kong dollar attractive.