HSBC, StanChart raise main lending rates in Hong Kong

Bloomberg

HSBC Holdings Plc and Standard Chartered Plc are raising their main lending rates in Hong Kong for the third time this year, a move that signals higher borrowing costs for property owners amid a real estate and economic downturn.
HSBC, the city’s biggest lender, is boosting its prime rate by 25 basis points to 5.625%. The move came hours after the Hong Kong Monetary Authority increased its base rate by 50 basis points, the seventh tightening this year, as it follows the US Federal Reserve. Rival Standard Chartered is also raising its best lending rate by 25 basis points to 5.875%.
Hong Kong boosts rates in line with the Fed due to the local currency’s peg to the US dollar. Higher rates and a broader economic slump have helped drive Hong Kong’s property market into a rare downturn, with prices of residential properties and rent for office space slumping.
This economy is capping off a tough year, with the government forecasting a 3.2% gross domestic product contraction for 2022 on weak global demand and the slow dismantling of pandemic restrictions.
There are some signs of recovery, as Hong Kong continues removing Covid-related movement curbs and as mainland China begins to reopen.