On Dec. 19, HKMA Chief Executive Eddie Yue stated that the decision to lower deposit rates rests with individual banks, depending on interbank rates and their cost structures. He noted that a lower interest rate environment benefits Hong Kong's economy and housing market, easing the burden on borrowers, while emphasizing that both the economy and property market are influenced by numerous factors.
Yue observed a gradual increase in property transactions over the past one to two months, with prices stabilizing and showing a slight upward movement. He indicated that the market appears to be stabilizing in the current slow interest rate reduction environment.
He also mentioned that the extent of potential interest rate cuts next year remains uncertain. According to the Federal Reserve's dot plot, the median expected cut is around 50 basis points; however, variability exists between meetings based on U.S. inflation and employment data. Additionally, uncertainties in policy and geopolitical factors are reflected in the financial markets, leading to expectations of continued volatility in both the stock and bond markets.
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