Hong Kong overnight figure rises for the first time this year

(Bloomberg) -The costs of overnight loans in Hong Kong jumped for the first time this year for the first time, as cash conditions further intensified the demand after the end of the end and an upcoming holiday. The overnight Hong Kong Interbank jumped to 5.018% on Tuesday, the highest since December. This takes the total increase in the three months ended September to nearly 500 basis points, most on record in Bloomberg data that returns to 2006. The latest rise in the borrowing costs reflects greater demand for cash as banks prepare before the regulatory balance sheet checks at the end of the term. The demand for funds is also high before the National Day Holiday Wednesday. “Banks are eager to obtain deposits and loans at the end of the term for financial reporting,” says Ryan Lam, head of research at Shanghai Commercial Bank Ltd. In Hong Kong. “Money traders could possibly take away from the gas pedal to feel the liquidity of the market around the term.” Cash conditions in Hong Kong were now at the end of the term, as the drainage of the liquidity by the city’s monetary authority to defend its currency has raised local interest rates, making the market more sensitive to seasonal financing pressure. Hong Kong’s Monetary Authority bought the local dollar in its number of interventions to keep the currency in a 7.75-7.85 per Greenback trading range. This has shrunk the total balance of banks’ cash held at the Central Bank – by about 70% since May to around $ 54 billion. This year’s rally in Hong Kong shares also influenced local financing costs. The equity profit attracts money from the continent of investors who have to buy the local currency to finance their purchases. The borrowing costs relieved slightly when Super Typhoon Ragasa pitched the city last week, which Zijin Gold International Co. forced to delay an initial public offer of $ 3.2 billion. One week Hibor dropped two basis points to 4.18% on Tuesday, but stayed above the longer ten-moon. “The inversion shows despite the passing of Super Typhoon Ragasa, HKD financing is expected to remain moderate by the end of the end and will only be moderate by the end of October,” Chun Him Cheung, a strategist at Bank of America, wrote in a research note on Monday. “If the total balance is reduced, this marginal decrease in cash loans can lead to an outspoken funding.” More stories like these are available on Bloomberg.com © 2025 Bloomberg LP