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Hong Kong dollar regular strategy | Banks are rushing for money

2022-06-25T03:12:58.910Z

The interest rate hike in the United States cannot be stopped. The widening of the interest rate gap between Hong Kong and the United States has caused the interbank interest rate in Hong Kong to rise and hit a new high. Many banks have raised the interest rate of time deposits to snatch funds.



The interest rate hike in the United States cannot be stopped, and the widening of the interest rate gap between Hong Kong and the United States has caused the interbank interest rate in Hong Kong to rise and hit a new high. The fixed deposit can be as high as 2.85, and the fixed deposit can reach 3% in 388 days.

Not to be outdone, large banks joined the war for capital, and HSBC raised interest rates three times within a month!

Some analysts predict that the fixed deposit interest rate in Hong Kong will still have room for further improvement this year. Investors are advised not to rush into long-term fixed deposits. They can “short-term first and then long”, that is, make short-term fixed deposits such as 3 months first, and then Renew to enjoy higher interest.


Standard Chartered's 1-year interest rate reached 2.4, the highest among the four major banks

Recently, a number of banks have raised the interest rates of Hong Kong dollar and US dollar time deposits to snatch funds. Among them, small and medium-sized banks, and the larger the amount, the more "rich".

As of this Thursday (23rd), compared with the minimum capital requirement of HK$500,000 or less, CNCBI's one-year fixed deposit of 2.85% is the highest in Hong Kong, and the minimum deposit is only 10,000 yuan.

Its USD 1-year fixed deposit rate is as high as 3.35%.

Second only to CNCB International is Fubon Bank, with a one-year Hong Kong dollar fixed deposit rate of 2.8%, but the minimum capital requirement is 500,000 yuan.

In addition, Overseas Chinese Wing Hang also launched a fixed deposit rate of up to 3%, the minimum capital requirement is 1 million yuan, and the fixed deposit period is 388 days.

In addition to small and medium-sized banks, the four major banks have also recently joined the battle to raise interest rates for funds, and the minimum initial deposit requirements are all only 10,000 yuan.

Among them, Standard Chartered has the highest rate of 2.4%, followed by Hang Seng and BOC Hong Kong at 2.3% and 2.2%, and HSBC at 1.5%.

The four major banks have also recently joined the battle to raise the deposit interest rate to scramble for funds. Compared with the one-year fixed deposit interest rate, Standard Chartered has the highest rate of 2.4%.

(file picture)

In the second half of the year, the Hong Kong dollar fixed deposit interest rate is expected to continue to rise. The fixed deposit should be short rather than long

At present, the bank balance is still above 200 billion yuan, which is still "flooding" in relative terms. However, Li Ruofan, global market strategist of the Treasury Markets Department of DBS Hong Kong, predicts that the Federal Reserve will raise interest rates by another 50 basis points in July. After that, it is expected to fall below 200 billion yuan, continue to fall to 150 billion yuan in the third quarter, and further drop to about 100 billion yuan by the end of the year.

With the balance gradually decreasing, Li Ruofan predicts that after the recent increase in bank deposit interest rates, it will rise again after a brief respite.

She suggested that if the long-term one-year fixed deposit interest rate is attractive, you can use a diversified investment strategy to use part of the funds as long-term fixed deposits, and the other part of the funds for short-term three-month fixed deposits. After further interest rate hikes, the deposit rate further rises and then renews.

Lin Junhong, head of the research department of Shanghai Commercial Bank, also pointed out that in previous years, the fixed deposit interest rate will fall after the end of the half year, but this year, considering that the United States will continue to raise interest rates, after the interest rate hike in July, Hong Kong's short-term 3-month fixed deposit to long-term 1-year fixed interest rate Rates are expected to have upward pressure.

He does not recommend making long-term fixed deposits at present. He suggested that investors can make short-term fixed deposits such as 1 to 3 months first.

Li Ruofan, global market strategist at DBS Hong Kong Treasury Markets Department, Li Ruofan predicts that the peak of the Fed's interest rate hike will end from the end of this year to the beginning of next year, while other countries will continue to raise interest rates at that time, and the dollar will be weak.

(file picture)

The dollar exchange rate is expected to be weak next year, and it is not recommended to exchange for fixed deposits

On the other hand, compared with Hong Kong dollar deposit interest, many banks' US dollar deposit interest rate is more attractive.

At present, the one-year USD time deposit interest rate exceeds 3%, including CNCB International and Fubon, while Fubon's short-term time deposit, namely the 3-month and 6-month interest rates, is higher than CNCBI, reaching 2.4% and 2.6 cm.

As for whether investors will be advised to exchange U.S. dollars for fixed deposits, Lin Junhong reminds that there may be costs involved, including the loss of the difference in exchange transactions. Unless you hold U.S. dollars on hand, it is generally rare to do so.

Li Ruofan said that the current strength of the US dollar is mainly affected by interest rate hikes and market risk aversion. It is expected that the US dollar index will be supported at around 101 this year, but it is expected that the peak of the Fed's interest rate hike will end from the end of this year to the beginning of next year. If interest rates continue to rise, the U.S. dollar will be weak, so if investors make U.S. dollar time deposits, short-term time deposits are also recommended to avoid double losses from exchange rate and interest rate differences.

Liu Jianheng, senior economist for Greater China at Standard Chartered Bank, said he does not expect China to cut interest rates this year to stimulate the economy.

(Photo by Chen Jiabi)

RMB fixed deposit still has a competitive advantage, interest rate and exchange rate expected to stabilize

In addition to Hong Kong dollar and US dollar time deposits, the fact that RMB fixed deposit interest rates are also attractive.

In terms of 1-year time deposits, most banks offer more than 2% interest, among them CNCBI and Fubon are up to 2.9%, BOC, Standard Chartered and OCBC Wing Hang are also up to 2.8%, and HSBC is also up to 2.2% centimeters.

However, will RMB time deposits be affected by China's interest rate and currency depreciation?

Liu Jianheng, a senior economist at Standard Chartered in Greater China, said that the dollar is expected to remain strong in the short term due to factors such as the Federal Reserve's interest rate hike and market hedging demand.

Due to the strong US dollar, the RMB is expected to remain weak and fluctuate in a range of 6.7 to 6.8 (about HK$0.85 to 0.87) by the end of the year.

However, the United States needs to balance inflation and economic growth. It is expected that the rate of interest rate hike at the end of the year will be moderate compared with the current rate, which is expected to provide a buffer for the RMB exchange rate.

As for China's recent economic growth challenges, compared to whether the US will raise interest rates to stimulate the economy through interest rate cuts, Liu Jianheng responded that he does not expect China to stimulate the economy through interest rate cuts this year. In April, the peak of the epidemic was improved, and the pace of improvement is expected to continue in June. As the epidemic eases, the government has introduced policies to stabilize the economy. It is expected that the Chinese economy will be able to resume growth in the second half of the year.

Source: hk1

All news articles on 2022-06-25

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