Hong Kong offshore yuan interbank rate hits record highs

[SHANGHAI] Hong Kong Interbank Offered Rates (HIBOR) all hit record highs on Monday, led by the overnight rate which spiked to over 13 per cent from 4 per cent Friday, as investors bailed out of offshore yuan for dollars.

All HIBOR tenors have been rising recently given that the onshore yuan has slid over 6 per cent since August, with overseas investors worried that Beijing is preparing for a far deeper devaluation in the yuan.

That has caused the offshore market to price the offshore currency at a deep discount to the onshore version .

In addition to the overnight rate rising sharply, all other offshore tenors are at similar record highs, ranging from 11 per cent for the one-week HIBOR to 5.2 per cent for the one-year tenor.

All are far higher than the onshore rates quoted in Shanghai (SHIBOR), where the overnight rate, while up from previously, is still pricing at less than 2 per cent.