December 17, 2015 / 8:44 AM / 2 years ago

UPDATE 1-Big Hong Kong banks leave prime lending rate unchanged after HKMA rate hike

(Updates to add StanChart, BOC (HK) decisions, analyst comment)

HONG KONG, Dec 17 (Reuters) - Hong Kong's three big commercial banks said on Thursday they will leave their best lending rates unchanged in Hong Kong, even after the city's central bank raised the base rate charged through its overnight discount window by 25 basis points.

HSBC Holdings , Standard Chartered

and Bank of China (Hong Kong) all made announcements saying there would be no immediate change.

"As there is ample liquidity in the Hong Kong financial system, the bank has decided to keep its best lending rate and Hong Kong dollar savings deposit rate unchanged," said Diana Cesar, chief executive, Hong Kong, HSBC, adding that her bank would monitor the situation.

StanChart later on Thursday said it would also keep its best lending rate unchanged at 5.25 percent per year, and Bank of China (Hong Kong) said its rate would remain 5 percent.

The Hong Kong Monetary Authority earlier on Thursday raised the base rate charged through its overnight discount to 0.75 percent.

Hong Kong tracks U.S. interest rate moves because its currency is pegged to the U.S. dollar, although local banks have some leeway to lag U.S. moves when setting prime rates.

Analysts had predicted that Hong Kong lenders might not immediately follow suit.

Barclays analyst Sharnie Wong, in a note, said there was a risk that a time lag between when Hong Kong banks raise rates and the U.S. hike could lead to capital outflows, which could cause depreciation of the Hong Kong dollar.

During the last U.S. rate hike cycle of June 2004-February 2005, ample liquidity in Hong Kong's banking system meant its main lenders similarly did not immediately increase rates. (Reporting by Twinnie Siu, Donny Kwok, Meg Shen and Lawrence White; Editing by Anne Marie Roantree and Richard Borsuk)

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