The Hong Kong Futures Exchange's (HKFE) panel of forecasters from 10 banks predicts the three-month HIBOR (Hong Kong interbank offered rate) will be one quarter percentage point lower on 17 January 2000 compared to its level on 15 November 1999 since the rate has already reflected Y2K fears and year-end financing pressures. The panel also sees one-month HIBOR rising slightly between now and mid-January 2000. Both forecasts appear in the latest edition of the HKFE's "HIBOR Futures Market Update" newsletter, published today.

The panellists' average forecasts for the final settlement prices of One-month and Three-month HIBOR Futures on 17 January 2000 show they expect the one-month HIBOR to be 5.66% on that date and the three-month HIBOR to be 6.01%. The forecasts for the one-month rate range from 5.25% to 5.95%, while the forecasts for the three-month rate are between 5.44% and 6.44%. On 15 November 1999, cash market rates for one-month and three-month HIBOR were 5.48% and 6.26% respectively.

In the newsletter's front page-article, Mr. Andrew Fung, Treasurer and Head of Capital Markets, Asia at Commonwealth Bank of Australia, addresses the timely subject "Millennium and Its Implications On HKD (Hong Kong dollar) Interest Rate Outlook." He concludes Hong Kong dollar interest rates should remain relatively stable and the current flat shaped money market curve is expected to prevail until the New Year.

The newsletter also includes an article on hedging year-end interest rate risks with HIBOR futures and a look at some key market statistics for the last twelve months.

"HIBOR Futures Market Update" is published by the HKFE's Economic Research Department, and it is available at HKFE offices free of charge to interested members of the public.

The Hong Kong Futures Exchange is a leading futures and options marketplace in the Asia Pacific Region, with a membership of over 130 companies, including a number of major international institutions. The Exchange is actively diversifying its product base, which now includes currency, interest rate and equity-based products.

For further enquiries, please contact HKFE Corporate Communications: Mr. Mark Tung 2842 9448 or Miss Chiu Yeung on 2842 9322.