Hong Kong Interbank Offered Rate (HIBOR): Meaning and Use

The Hong Kong Interbank Offered Rate (HIBOR) is an interbank benchmark used in Hong Kong money markets and benchmark-linked financial contracts. It helps anchor pricing for some floating-rate loans and other interest-sensitive instruments.

How It Works

Benchmark rates such as HIBOR matter because they connect borrowing and valuation to changing funding conditions in a local market. When contracts reset off HIBOR, changes in the benchmark can directly affect borrower cost and investor cash flow.

Worked Example

A floating-rate facility priced at a spread over HIBOR will become more expensive if the benchmark rises before the next reset date.

Scenario Question

A borrower says, “Only the contractual spread matters; the benchmark itself is just background information.”

Answer: No. In a benchmark-linked structure, the benchmark is a real part of the total rate.

Related Terms

• LIBOR (London Interbank Offered Rate): LIBOR played a similar benchmark role in many other markets.
• TIBOR (Tokyo Interbank Offer Rate): TIBOR is another regional interbank reference rate.
• Interbank Rates: HIBOR belongs to the broader family of interbank benchmark rates.