Question

How HIBOR (low and high) affected other financial markets.

i mean not the local market in HK but other financial markets (such as US or Japan)

Answer 1

The HIBOR stands forHong Kong Interbank Offered Rate, which is the benchmark interest rate, stated in Hong Kong dollars, for lending activities between banks within the Hong Kong market. The HIBOR rate is used as a  reference rate for lenders and borrowers that participate directly or indirectly in the Asian economy.

HIBOR's main function is that the rate is used as a reference in the Asian markets for debt instruments. This function assists government and corporate bonds, mortgages, and derivatives, such as currency and interest rate swaps, among many other financial products.

if a corporate company is isuuing the debentures giving 6% as the coupon rate. The HIBOR rate is only 5%. thus means that the company is giving an extra rate of 1%.In this way, the returns of different financial instruments are compared with the HIBOR rate.