Hong Kong interbank rates edge higher

Hong Kong interbank rates crept higher on Wednesday because of month-end demand for funds and on expectations of further rises in US interest rates.
The overnight interbank rate was quoted at 3.85/3.90 percent after hitting a session high of 4.125 percent, rising from 3.80/3.85 percent late on Tuesday.
The tomorrow/next rate was bid at 4 percent, said a dealer from a local bank.
Traders also said interbank rates and Hong Kong dollar forwards spiked as US bond yields rose following upbeat economic data overnight, which bolstered expectations that the Federal Reserve would continue to raise interest rates.
Hong Kong tends to follow US rate moves because the local currency is pegged to the US dollar.
The benchmark three-month local interbank rate rose 6 basis points to 4.25/4.30 percent from Tuesday's 4.19/4.24 percent. The one-month rate firmed to 4.55/4.60 percent versus 4.48/4.53 percent.