With all the talk we are now getting about an imminent increase in US interest rates pushing Hong Kong rates even further up, it is time to point out one salient fact.
Our interest rates have not been going up.
In fact they have recently been going down and quite notably too.
The first chart shows the picture on a comparison between Hong Kong dollar and US dollar one month interbank rates.
Our interbank rates were lower than their US equivalents in May but then the first signs that US rates could be going up again sent ours shooting up much faster on the reasoning that, if they were going way up anyway (this was considered inevitable), why not take some precautions and send them up there right now.
However, after peaking at about 6.4 per cent at the beginning of September, the one month interbank rate has come tumbling right back down again to only a smidgin above the US dollar level.