HKD rates have more than caught up with USD rates in the current upward move. The move in HKD rates has been quick, especially considering that interbank liquidity stays adequate.
The indicators we have been monitoring do not point to an obviously tight HKD liquidity situation.
Aggregate Balance (AB, interbank liquidity) has been stable since mid-September when the HKMA stopped issuing extra EFBs (Exchange Fund Bills). Even upon previous extra issuances, the monetary base stayed fairly stable with only shifts of liquidity among various components.
HKD loan-to-deposit ratio edged up in November but stayed at a low level. Percentage of HKD loans for use outside HK continued to fall.
HKD deposit base continued to expand. Hi-Li (HKD basis swaps) has been trending higher but at a mild pace, staying below zero at 1Y and beyond.


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