Interbank liquidity is expected to receive further relief today after the Hong Kong Monetary Authority yesterday settled about US$110 million of buying orders, which would result in a release of HK$851 million into the system.
The move will boost liquidity in the system at the start of today's trading to HK$1.35 billion from yesterday's HK$500 million.
Meanwhile, the intervention from the United States to boost the yen helped improve market confidence, pushing interbank rates down to single-digit levels. The benchmark three-month rate eased 1.5 percentage points to 9.5 per cent, after touching the day's low of 9.125 per cent. The one-month rate dropped 75 basis points to 9.25 per cent, after hitting the day's low at 9 per cent. Commonwealth Bank of Australia treasurer Andrew Fung Hau-chung said the movements yesterday would lessen the chance that banks would need to raise prime rates today.
