HSBC cut its best lending rate by 25 basis points for the first time in 11 years

category:Finance
 HSBC cut its best lending rate by 25 basis points for the first time in 11 years


HSBC Hong Kong announced on October 31 that it would cut its prime rate by 12.5 basis points from 5.125% to 5.0% from November 1, 2019.

The most favorable interest rate for Hong Kong dollar is determined by various banks in Hong Kong, which is the benchmark interest rate for loans, especially for real estate mortgage loans.

This is the second time in 13 months that HSBC has adjusted the optimal lending rate, 11 years after HSBC Hong Kong cut the optimal lending rate.

The last time HSBC Hong Kong adjusted the optimal interest rate of Hong Kong dollar was in September last year, when the Federal Reserve raised interest rates continuously. HSBC Hong Kong raised the best interest rate by 12.5 basis points from 5% to 5.125% from September 28, 2018. The last time HSBC cut its prime rate was on November 10, 2008, when it cut it by 25 basis points.

At the same time, HSBC Hong Kong announced to cut the interest rate of Hong Kong dollar savings account by 12.4 basis points from 0.125% to 0.001% from November 1, 2019. The last time HSBC adjusted the Hong Kong dollar savings deposit rate was on September 28, 2018, when it raised the interest rate by 12.4 basis points.

At 2 a.m. on October 31, Beijing time, the Federal Reserve announced that it would cut the federal funds rate by 25 basis points to 1.50% - 1.75%. This is the third rate cut by the Federal Reserve since December 2008 and this year. The last rate cut occurred in the early morning of September 19, Beijing time, when the Federal Reserve announced that it would cut the federal funds rate by 25 basis points to 1.75% - 2.00%.

Subsequently, the Hong Kong Monetary Authority announced in the morning of October 31 that the basic interest rate would be reduced by 25 basis points to 2% in accordance with the preset formula, with immediate effect. The move to lower the base rate was made in response to a 25 basis point target range for the us to lower the federal funds rate on October 30 (US time).

The base rate is the base rate used to calculate the discount rate applicable to the repo transaction through the discount window. The current base rate is set at the lower limit of the current US federal funds rate target range plus 50 basis points, or the average of the five-day moving average of overnight and one month Hong Kong Interbank Offered rates, whichever is higher. It is worth mentioning that the Hong Kong Monetary Authority has repeatedly followed the Federal Reserve to reduce the basic interest rate in Hong Kong, but the local banks in Hong Kong have not adjusted the most favorable interest rate, until today, HSBC Hong Kong took the lead in action. HSBC announced interest rate adjustment today, mainly considering the US Federal Reserves interest rate cut again and the macroeconomic environment in the local and international markets, I believe this will help ease the business pressure of Hong Kong enterprises, said Shi Yingyin, chief executive of HSBC Hong Kong. We will continue to pay close attention to the economic situation and market competition environment, and examine the banks interest rate level in due course. Source: surging news editor: Wang Xiaowu NF

The base rate is the base rate used to calculate the discount rate applicable to the repo transaction through the discount window. The current base rate is set at the lower limit of the current US federal funds rate target range plus 50 basis points, or the average of the five-day moving average of overnight and one month Hong Kong Interbank Offered rates, whichever is higher.

It is worth mentioning that the Hong Kong Monetary Authority has repeatedly followed the Federal Reserve to reduce the basic interest rate in Hong Kong, but the local banks in Hong Kong have not adjusted the most favorable interest rate, until today, HSBC Hong Kong took the lead in action.