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Hong Kong Interbank Rates Jump to Decade Highs After Currency Surge

The overnight Hong Kong Interbank Offered Rate jumped about 2 percentage points to 3.85%, its highest since 2007. One-month Hibor rose less sharply, but still reached nearly 2.17%—the highest level in 10 years.

The figures, reported once daily, came after the Hong Kong dollar unexpectedly surged 0.42% on Friday, its biggest gain since 2003. On Monday, the currency, which is pegged in a range of 7.75 to 7.85 to the U.S. dollar, was little changed at 7.8088.

Higher interbank charges would put pressure on banks to increase their lending rates for customers, said Eli Lee, head of investment strategy at Bank of Singapore. A stronger currency is bad for exporters, while pricier mortgages would tend to depress the property market. However, Mr. Lee said higher rates would be good for banks and insurers.