HSBC halts prime rate cutback

HSBC will maintain its Hong Kong benchmark lending rate at 5 percent per annum last changed on 10 November 2008.

In November, other banks in Hong Kong like the BOC Hong Kong Ltd., Bank of East Asia Ltd., and Hang Seng Bank—an HSBC unit—likewise pulled their Best Lending Rates down to 5 percent. Meanwhile Standard Chartered Bank reduced its Best Lending Rate up to 5.25 percent. In January this year, Standard Chartered announced that its Best Lending Rate will remain unchanged at 5.25 percent.

Hong Kong banks usually follow interest rate moves by the Hong Kong Monetary Authority, though not obligated to do so. On the other hand the HKMA matches the policy rate of the US Federal Reserve.

HSBC has decreased its lending rate four times since December 2007 when it stood at 6.75 percent. It went down to 6 percent last January 2008, to 5.75 in February 2008, and to 5.25 in March 2008.

The 5 percent rate has been the lowest since November 2004.