The US Federal Reserve raised interest rates by 0.75%.
Financial Secretary Chen Maobo said that inflation in the United States is very high, so a relatively large interest rate hike is within expectations, and Hong Kong has sufficient funds, and it may not be necessary to raise the prime interest rate (P) immediately. It depends on future arbitrage activities and funding conditions.
Chen Maobo continued to point out that this time the Federal Reserve has raised interest rates by a large margin, and the pace of interest rate hikes and balance sheet reductions by the Federal Reserve will continue, and the global economy will be under certain pressure. The external market risk factors faced by Hong Kong will increase. As the growth of the United States and other countries is expected to turn Poor, Hong Kong exports may be affected.
At the same time, with the widening of the Hong Kong-US interest rate differential, funds are expected to flow out of Hong Kong, but he stressed that the balance of the banking system still has a strong buffer.
He also pointed out that the external environment is normal, Hong Kong’s exports may be affected, and interest rate hikes will also affect capital flows, which will have an impact on emerging economies with poor fundamentals. In addition to high costs, asset prices may also be affected in an interest rate hike environment.
In terms of inflation in Hong Kong, Chen Maobo said that he saw that it was still moderate, and the annual estimate was about 2% to 2.1% earlier.