Hong Kong overnight interbank offered rate rises to 4.647%, highest since Dec 31, 2024

Hong Kong overnight interbank offered rate rises to 4.647%, highest since Dec 31, 2024

The Hong Kong overnight interbank offered rate (HIBOR) has surged to 4.647%, marking the highest level since December 31, 2024. This significant increase is attributed to the unwinding of a monthslong window for the so-called carry trade, according to Loretta Chen of Reuters [1].

The rise in borrowing costs for the Hong Kong dollar is expected to have a profound impact on the local real estate market and the Hang Seng stock index. Early signs of recovery in the real estate sector may be dampened, and the index's stellar performance for the year could face headwinds. The sudden uptick in interest rates is a stark reminder of the challenges faced by the economy as it attempts to stabilize [1].

In related news, the Bank of China Hong Kong has expressed its intention to apply for a stablecoin issuer license, aiming to become one of the first licensed issuers in the region. The deadline for the first batch of applications is the end of September, as reported by The Standard [2]. The Hong Kong Monetary Authority has declined to comment on the matter, adding to the intrigue surrounding this regulatory development.

The HKD Interest Settlement Rates, as published by the Hong Kong Association of Banks (HKAB), reflect the current market conditions. On August 27, 2025, the overnight rate stood at 3.12357%, while the 12-month rate was 3.23393%. These rates have been steadily increasing, signaling a trend of rising borrowing costs in the Hong Kong financial market [3].

Investors and financial professionals should closely monitor these developments, as they may have significant implications for the local economy and financial markets. The rise in HIBOR could lead to higher borrowing costs for businesses and consumers, potentially impacting overall economic growth. Additionally, the regulatory changes surrounding stablecoins may offer new opportunities for financial innovation, but also raise questions about the stability and security of these digital assets.

References:
[1] https://asia.nikkei.com/business/markets/hong-kong-interest-rate-surge-puts-struggling-economy-to-test
[2] https://www.lookonchain.com/feeds/27069
[3] https://www.hkab.org.hk/en/rates/hibor