Hong Kong Overnight Rate Surges Past 5% for First Time This Year

The cost of overnight borrowing in Hong Kong jumped past 5% for the first time this year, as cash conditions tightened further on quarter-end demand and an upcoming holiday.

The overnight Hong Kong Interbank Offered Rate jumped 130 basis points to 5.018% on Tuesday, the highest since December. That takes the total rise in the three months ended September to nearly 500 basis points, the most on record in Bloomberg data going back to 2006.

The latest spike in borrowing costs reflects heightened demand for cash as banks prepare for regulatory balance sheet checks at the end of the quarter. ...