Following is the transcript of remarks by the Financial Secretary, Mr Paul Chan, at a media session after officiating at the Commissioning Ceremony of the Happy Valley Underground Stormwater Storage Scheme today (March 16).
 
Reporter: Secretary, what do you think in the short term? Will Hong Kong banks be following the interest rate hike rise? And also, what do you think will be the impact on the property market and also the business environment?
 
Financial Secretary: As you know, last night US raised interest rate by 0.25 per cent, and what is more important is that these interest rate hikes will continue into 2019. In other words, 2017-2018 will be seeing interest rate hikes, one by one. Under the peg system, Hong Kong dollar interest rate will need to follow, although the magnitude will be different and the timing may not be the same, but eventually we have no choice. If their interest rate continues to raise, Hong Kong interest rate will follow. In the short term, because of the ample liquidity in the market, there is no immediate urgency for Hong Kong to follow suit. But I would like to remind property purchasers that according to our past experience, when this interest rate hike cycle starts, eventually Hong Kong interest rate will follow and consequently there will be a negative impact on property price. So one has to be very careful in assessing their ability to repay when they raise mortgage loans to buy properties.
 
(Please also refer to the Chinese portion of the transcript.)

Ends/Thursday, March 16, 2017
Issued at HKT 18:00

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