Corporate treasurers charged with managing borrowing costs are sailing in 'uncharted waters', according to Patrick Gillot, Standard Chartered Bank's treasury head. 'We are in a situation unprecedented over the last 20 years. To see 10 discount rate cuts in a single year is something that has never happened before in my entire career,' said Mr Gillot, head of global markets (North East Asia), for Standard Chartered. Bank treasury activities had benefited from the environment and, when the results for this year were published, treasury operations would reveal strong profit contributions, he said. 'This has been an exceptional year for treasury operations by banks.' But interest-rate trends were in uncharted waters and it would be foolish to hazard confident predictions, he said. In theory, so long as the Hong Kong peg held, accepted as a given by Standard Chartered analysts, and if the present deflationary environment was sustained, there was room for further interest rate cuts in Hong Kong following further cuts to rates in the United States. 'In the past, a Fed Fund rate of 3 per cent was considered to be the floor. Now we have broken that floor, which means that if we have further deflation rates can continue to go much lower in theory and still allow investors a positive return.' But the deflationary data tracked in the US in September was probably a result of consumer reaction to the terrorist attacks, rather than a long-term trend. Corporate treasurers should begin to lock in to the low borrowing costs offered by swapping out of their roll-over contracts and using the options presented on the derivative markets. 'It is probably a good moment, because money is not very expensive now. But I would not recommend covering 100 per cent of existing borrowings, because we may not have seen the last of the interest rate cuts,' he said.