Hong Kong Dollar One-Month Rate Climbs to Highest Since 2007
- Aggregate balance shrank due to rounds of FX intervention
- Hibor may pare some of its surge in July, Credit Agricole says
This article is for subscribers only.
The cost for banks to borrow Hong Kong dollars from each other for a month rose to the highest level since 2007 after prolonged currency intervention shrank the city’s liquidity pool and demand for cash climbed toward quarter-end.
The one-month Hong Kong interbank offered rate for the local currency — known as Hibor — increased eight basis points to 5.10%, having more than doubled from this year’s low set in February. The gauge’s discount to the US dollar interbank rate has now almost vanished, making the once popular bearish-Hong Kong dollar strategy less appealing.