Hong Kong Releases Major ‘Silver Bonds’ at Reduced Coupon Ahead of Anticipated US Fed Rate Cut: A Strategy for Inflation Management and Infrastructure Development

Hong Kong has marketed one of its largest 'Silver Bonds' at a reduced coupon prior to the US Fed's rate decrease. The financial secretary states that these bonds will fund long-term infrastructure initiatives for the benefit of both the economy and the quality of life of the citizens.

Hong Kong is reducing the promised yearly interest payment for its ninth series of "Silver Bonds" for investors who are 60 years old or older to deal with rising inflation, just days ahead of a projected US interest rate decrease next week.

Kenny Ng Lai-yin, a strategist at Everbright Securities International, suggested that due to the lower assured return compared to last year's issue, we might see a decrease in the number of subscriptions this time. He stated that a 4 per cent rate is still favourable as it's higher than the current time deposits and other bond products, and it also has less risk compared to investing in stocks.

The inflation-linked bond issuance aligns with the volume of the previous year's issuance and surpasses the HK$35 billion sale from August 2022.