Hong Kong banks will probably raise interest rates for the second time in four years if the United States Federal Reserve raises rates as expected this month, according to senior bankers. 'There are still capital outflows from the banking system at the moment,' said Standard Chartered Bank director Peter Wong Tung-shun. 'There is now only about $3.2 billion [in the aggregate balance, compared with $55 billion between February and May] and with the interbank rate beginning to rise we don't rule out an interest rate increase in Hong Kong.' Since Monday, the three-month Hong Kong interbank offered rate has jumped 18 basis points to 1.06 per cent, with the market waiting for hints from Federal Reserve chairman Alan Greenspan about its intentions at its next policy meeting, on September 21. Mr Wong's comment was echoed by Hang Seng Bank chief executive Vincent Cheng Hoi-chuen. 'Although the aggregate balance is decreasing, it is still in the positive area,' said Mr Cheng. 'Nevertheless, banks are now facing greater pressure to raise rates. So if the US raises rates this month, there is a greater chance we will follow.' Last month, local lenders who had previously slashed savings rates to an historic low of 0.001 per cent, including HSBC, Bank of China (Hong Kong), Bank of East Asia and Hang Seng Bank, raised savings deposit rates to 0.01 per cent, the first such rise in Hong Kong in four years. All retail banks left their best lending rate unchanged at 5 per cent. However, some bankers said they did not expect the Fed to raise rates this month. HSBC general manager Raymond Or Ching-fai, for one, thinks the inconsistent economic data that has been released in the US lately will lead Mr Greenspan to adopt a more conservative rate policy.