Market Chatter: HKMA Forecast to Cut Rates in 2026 In Line With US Moves

MT Newswires Live01-05

Hong Kong's de facto central bank could continue its monetary easing in 2026 in line with expected rate cuts in the U.S., The South China Morning Post reported Friday, citing analysts.

The Hong Kong Monetary Authority shadowed the U.S. Federal Reserve in 2025 by reducing its key policy rates by a total of 75 basis points, and could further cut rates by 75 basis points this year, according to Ryan Lam Chun-wang, Hong Kong head of research at Shanghai Commercial Bank.

This would bring the one-month Hong Kong interbank offered rate to 2.26% by the end of 2026 from the 3.18% recorded on Dec. 18. The three-month Hibor could fall to 2.3% from 3.1% by the end of 2026, Lam forecasted.

Meanwhile, analysts at Barclays expect less aggressive monetary easing, forecasting instead two 25-basis-point rate cuts in 2026, the report said.

"The magnitude of rate cuts remains to be seen, but the direction of interest rates is down, not up," Aaron Costello, head of Asia at Cambridge Associates, was quoted as saying by the SCMP.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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