Lenders in Hong Kong are likely to follow an expected reduction in interest rates by the United States Federal Reserve this week but will not match the cut, analysts say. 'Lenders could cut rates at least 25 basis points if the US central bank lowers its Fed funds rate 75 basis points,' said Andrew Fung Hau-chung, a general manager at Hang Seng Bank. Hong Kong prime lending rates could fall further to a range of 5.5 per cent to 5.75 per cent if this scenario emerged, from the present range of 5.75 per cent to 6 per cent. Analysts expect the Fed will cut the rate 50 to 75 basis points on Wednesday (Hong Kong time). Mr Fung expected Hong Kong lenders to follow the US move but said the size of the cuts to domestic rates would depend on the level of interbank rates - or the interest rates commanded by surplus bank deposits placed on the wholesale money market. 'Banks may cut their interest rates by 50 basis points if one-month interbank rates decline to about 1.75 per cent,' he said. One-month and three-month interbank rates stood at 1.825 per cent and 1.955 per cent, respectively, in late trading on Friday. Joseph Yam Chi-kwong, chief executive of the Hong Kong Monetary Authority, said last week that there was little room for Hong Kong to follow US interest rate cuts due to the already-low deposit rate. The standard rate for a deposit of HK$150,000 is just 0.5 per cent. He Guangbei, chairman of the Hong Kong Association of Banks, last week said it would be difficult for Hong Kong lenders to match a 50 basis point cut without destabilising the economy by fuelling inflation.