This week, monetary conditions in Hong Kong began tightening again as a crucial short-term interest rate moved past 3%, a level some financial experts warn could hinder the region’s fragile economic rebound. n nOn Wednesday, the one-month Hong Kong Interbank Offered Rate (Hibor) rose above 3% for the first time since May, marking a notable shift in funding costs. Should this rate remain elevated, it may dampen investor sentiment and reduce appetite for borrowing, potentially slowing consumer and business spending, according to a recent analysis by Morgan Stanley. Higher financing costs could also pressure property markets and corporate balance sheets, complicating efforts to sustain growth momentum in the special administrative region. n
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Hong Kong’s Key Rate Climbs Above 3% to Pose Risks for Economy
Liquidity conditions in Hong Kong resumed tightening this week with a key money-market rate climbing above a level that some analysts say may stifle a nascent economic recovery. n nThe benchmark one-month Hong Kong Interbank Offered Rate — or Hibor — jumped above the closely watched threshold of 3% Wednesday, reaching the highest since May. If the gauge sustains above that level it could have a negative impactBloomberg Terminal on the economy as investors would become more cautious, and borrowing demand would fall, Morgan Stanley analysts wrote in a note last week.