Hong Kong Says Borrowing Cost Surge Driven by Demand for Cash

(Bloomberg) — The surge in the Hong Kong’s interbank funding rates was spurred by demand for the local currency amid market volatility and quarter-end needs, the city’s monetary authority said.

The overnight cost to borrow in the interbank market soared 253 basis points to 4.14% on Tuesday in its biggest gain since Bloomberg started compiling the data in 2006. The one-month gauge increased by 51 basis points, the most since the global financial crisis in 2008.