Archive · 30 Sep 2025
Hong Kong Overnight Rate Surges Above 5%
The cost of borrowing money overnight in Hong Kong has gone up.
This is because banks need more cash at the end of the financial quarter for reporting and also because of an upcoming holiday.
The rate jumped to over 5%, the highest it's been this year.
This rise is connected to the Hong Kong Monetary Authority defending the local currency and banks preparing for end-of-quarter checks.
The increased cost of borrowing reflects a tight market due to the increased demand.
Even after a typhoon, the costs are expected to stay high until the end of October.
Overnight borrowing cost in Hong Kong surged past 5% for the first time this year.
The overnight Hong Kong Interbank Offered Rate jumped 130 basis points to 5.018% on Tuesday.
Banks are preparing for regulatory balance sheet checks at the end of the quarter.
Demand for funds is high ahead of the National Day holiday on Wednesday.
Equity gains are attracting money from mainland investors, who need to buy the local currency to finance their purchases.
- Who
- Hong Kong Monetary Authority, Banks, and Money Traders
- What
- Overnight borrowing cost surged past 5%.
- When
- Tuesday; End of quarter; Ahead of National Day holiday
- Where
- Hong Kong
- Why
- Heightened demand for cash due to quarter-end regulatory checks and the National Day holiday.
- Overnight Rate
- Jumped to 5.018%
- Basis Point Increase
- 130
- Timeframe
- Highest since December
- 3-Month Rise
- Nearly 500 basis points
- Reason
- Quarter-end demand & upcoming holiday