Hong Kong's exports under pressure from interest rates

105
2
Hong Kong's exports under pressure from interest rates

In this file photo, Hong Kong Financial Secretary Paul Chan Mo-poChan Mo-po gives an interview. Financial Secretary Paul Chan Mo-poChan Mo-po posted on Sunday that Hong Kong's exports remain under pressure due to the multiple countries' interest rates.

He wrote in his official blog that the upcoming figure for Hong Kong's export value in August is expected to widen its decline after a drop of three consecutive months.

He said that tightened monetary policies around the world will weaken the momentum of global growth.

The US Federal Reserve raised its benchmark interest rate by 75 basis points to a range of 3 percent to 3.25 percent last week, the third consecutive three-quarter increase that the Fed has imposed to combat the country's soaring inflation.

Finance chief says there isn't a big risk to property prices.

The Bank of England raised interest rates by 50 basis points while the Riksbank, Sweden s central bank hiked rates by 1 percentage point, exceeding market expectations.

In July, Hong Kong's total exports of goods plunged 16.2 percent year-on-year, compared to a 12.5 percent decline in June. The total exports of goods decreased by 8.8 percent for the first seven months of the year, compared to the same period last year.

The city's major banks, including HSBC, Standard Chartered, Bank of China Hong Kong and Hang Seng Bank, all lifted their prime rates by 12.5 basis points last week, as they acknowledged the growing burdens of borrowing costs for small and medium-sized enterprises.

Chan warned of downward pressure on asset prices and financial market fluctuations, especially in foreign-currency exchanges and securities.

As Hong Kong's travel restrictions relaxed on Monday - arrivals to the city no longer need to be quarantined and they now face only three days of medical surveillance - Chan said Hong Kong people should take advantage of the opportunities presented by the economic recovery.