HKMA Yu Weiwen: Those who are not worried about large capital outflows must manage interest rate risk well

The U.S. Federal Reserve raised interest rates sharply by 0.75%, the largest increase in 28 years.

The President of the HKMA, Yu Weiwen, said today (16th) that the US interest rate hike by 0.75% is in line with market expectations.

Affected by the increase in interest rates, the interest rate gap between Hong Kong and the United States has widened, causing the market to carry out interest rate arbitrage, and funds will flow out of Hong Kong dollars.

Yu Weiwen also reminded that home buyers need to be mortgagers, pay attention to changes in interest rates, and manage risks well.

Yu Weiwen said that the U.S. interest rate hike is accompanied by the operation of shrinking the balance sheet. There will still be uncertainties and fluctuations in the market for a period of time in the future. Investors need to be careful.

The trend of Hong Kong's property market is not only affected by mortgage interest, but also by other factors such as land supply, external economy and labor market. Rising interest rates can affect borrowing decisions.

As for whether there will be negative equity, he said that it depends on the trend of the property market. The property market has been stable since the beginning of the year. If property prices fall, high-percentage mortgage buildings may have negative equity on their books, but banks will have relevant requirements for mortgage loan applications. , including the percentage and repayment ability, and it is necessary to carry out a stress test on the applicant to see whether it is still able to provide housing in the case of rising interest rates.

Raising interest rates will increase the burden on property owners, but it is believed that those who pass the bank stress test are all capable people, and the quality of bank assets will not change much.

He also said that the US interest rate hike will continue, and it is expected that the HKMA will continue to maintain the exchange rate of the Hong Kong dollar against the US dollar, but the relevant frequency depends on the market's demand for the Hong Kong dollar.

As for changes in Hong Kong interest rates, it depends on factors such as market demand for funds. For example, earlier corporate dividends increased the demand for Hong Kong dollars. Recently, the global market has been weak, and the demand for Hong Kong dollars will also decline.

The bank's commercial interest rate will depend on the Hong Kong dollar interest rate, its own cost structure, and other considerations.

Recently, some banks have been observed to increase their fixed deposit rate.