How lower US interest rates will help Hongkongers even if local prime rates don’t drop

South China Morning PostCenter-RightEN 1 min read 100% complete by Enoch YiuJanuary 26, 2026 at 04:30 AM

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Despite expectations that Hong Kong banks will likely hold steady on prime rates, Hongkongers will still benefit from anticipated US interest rate cuts, according to the HKMA. While the HKMA mirrors the US Federal Reserve's monetary policy due to the linked exchange-rate system, local commercial banks independently set prime and deposit rates. The HKMA deputy chief executive stated that Hong Kong banks are unlikely to cut prime rates further due to already low savings rates and narrow net interest margins. However, lower US rates will still drive down local interbank rates, benefiting many borrowers in Hong Kong. The current net interest margin of Hong Kong lenders is about 1.4 per cent, which is among the narrowest worldwide.

Key Entities & Roles

Key Player Opposition Context

Arthur Yuen Kowk-hang ×280% United States ×280% Federal Reserve 85% Hong Kong Monetary Authority (HKMA) ×390% Hong Kong ×495%

Keywords

interest rates 100% hong kong 90% us federal reserve 80% prime rate 70% hkma 70% net interest margin 60% commercial banks 50% monetary policy 50% savings rate 40%

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Positive

Score: 0.20

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South China Morning Post

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Center-Right (0.50)

Far LeftCenterFar Right

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90%

This article was automatically classified using rule-based analysis. The political bias score ranges from -1 (far left) to +1 (far right).

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interest rates hong kong us federal reserve prime rate hkma net interest margin commercial banks monetary policy savings rate

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