DEFINITION of 'Hong Kong Interbank Offer Rate - HIBOR'

An interest rate stated in Hong Kong dollars on the lending and borrowing between banks in the Hong Kong interbank market. The terms of the deposits vary from overnight to one year. The U.K. version, the London Interbank Offer Rate (LIBOR), is similar to the HIBOR. More than anything else, the HIBOR is a reference rate for lenders and borrowers that participate directly or indirectly in the Asian economy.

BREAKING DOWN 'Hong Kong Interbank Offer Rate - HIBOR'

The interbank market is used by banks for transferring funds and currency and managing liquidity. If a bank is nearing the point at which withdrawals are depleting short-term cash reserves, that bank will go into the Hong Kong interbank market and borrow money at the HIBOR.

For example, an interest rate swap involving two counterparties with good credit ratings, both of which have bonds issued in Hong Kong dollars, will likely be quoted in HIBOR plus a given percentage.

RELATED TERMS
  1. Hong Kong SAR, China

    Hong Kong is a financial and business center in China.
  2. Interbank Call Money Market

    An interbank call money market is a short-term money market which ...
  3. Interbank Rate

    The rate of interest charged on short-term loans made between ...
  4. Hong Kong Monetary Authority Investment ...

    A sovereign wealth fund of the Government of the Hong Kong Special ...
  5. London Interbank Mean Rate - LIMEAN

    The mid-market rate in the London Interbank market, which is ...
  6. Euro LIBOR

    London Interbank Offer Rate denominated in euros. This is the ...
Related Articles
  1. Trading

    The Hong Kong Dollar: What Every Forex Trader Needs To Know

    Find out everything you need to know about the eighth most traded currency in forex.
  2. Investing

    How To Trade the Hong Kong Stock Exchange through ETFs (ETFC, EWH)

    The Hong Kong Stock Exchange is the eighth largest in the world and easily accessible through ETFs.
  3. Investing

    Hong Kong And China's Touchy Ties

    Though Hong Kong and China have strong economic ties, Hong Kongers who have lived under the British influence are wary about China’s intentions.
  4. Investing

    The Top 3 ETFs For Investing in Hong Kong

    Discover information and analysis of three exchange traded funds that investors can use to access potential profits from investing in Hong Kong.
  5. Investing

    EWH: iShares MSCI Hong Kong ETF

    Learn about the iShares MSCI Hong Kong fund, which invests in various equities of companies listed on the Hong Kong Stock Exchange.
  6. Investing

    Disney Offers to Share Cost of Hong Kong Expansion

    Walt Disney Co. may aid in expanding Hong Kong Disneyland in exchange for a bigger stake.
  7. Insights

    What You Should Know About Hong Kong SAR

    You might know that Hong Kong is both a bastion of capitalism separate from (but also administered by) socialist China. How did it get that way?
  8. Investing

    The Top 5 ETFs to Track the Hang Seng for 2016 (EWH, FXI)

    Learn about ETFs that allow access to Hong Kong equities for investors seeking exposure to Hang Seng Index stocks traded on the Hong Kong Stock Exchange.
  9. Investing

    This is the Cheapest Major Stock Market Globally

    Hong Kong's Hang Seng Index trades at a P/E of 9, compared with a P/E of between 15 and 20 for most major indices.
  10. Investing

    The Foreign Exchange Interbank Market

    Can your forex broker offer you the most competitive pricing? Learn how the market's biggest players affect you.
RELATED FAQS
  1. Why is Hong Kong considered a tax haven?

    Discover why Hong Kong is one of the world's leading tax havens. Low taxation on high-net-worth individuals and corporations ... Read Answer >>
  2. What is the difference between LIBID and LIBOR?

    Both LIBID and LIBOR are rates primarily used by banks in the London interbank market. The London interbank market is a wholesale ... Read Answer >>
  3. What is the difference between LIBOR, LIBID and LIMEAN?

    LIBOR, LIBID and LIMEAN are all reference rates used to benchmark short-term interest rates. The London Interbank Offered ... Read Answer >>
  4. Are Chinese special administrative regions (SAR) special status permanent?

    Find out whether the special status of China's special administrative regions, Hong Kong and Macau, is intended to be a permanent ... Read Answer >>
  5. What are the differences between B-shares and H-shares traded on Chinese stock exchanges?

    Learn about B shares and H shares of publicly listed companies in mainland China and Hong Kong stock exchanges, and the differences ... Read Answer >>
  6. How does LIBOR compare to the Federal Reserve rate as an accurate indicator?

    Explore a comparison of the predictive efficacy of the Federal Reserve's fed funds rate and the Intercontinental Exchange's ... Read Answer >>
Hot Definitions
  1. IRR Rule

    A measure for evaluating whether to proceed with a project or investment. The IRR rule states that if the internal rate of ...
  2. Short Covering

    Short covering is buying back borrowed securities in order to close an open short position.
  3. Covariance

    A measure of the degree to which returns on two risky assets move in tandem. A positive covariance means that asset returns ...
  4. Liquid Asset

    An asset that can be converted into cash quickly and with minimal impact to the price received. Liquid assets are generally ...
  5. Nostro Account

    A bank account held in a foreign country by a domestic bank, denominated in the currency of that country. Nostro accounts ...
  6. Retirement Planning

    Retirement planning is the process of determining retirement income goals and the actions and decisions necessary to achieve ...
Trading Center