Hong Kong lenders yesterday left their prime lending rates unchanged, ignoring another steep cut in rates for the US dollar, to which the local currency is pegged.

The move was widely criticised by analysts, who said the banks should have reduced interest rates to help Hong Kong's economy and ease the burden of borrowers in the current difficult market conditions.

Stephen Cheung Yan-leung, a professor of finance at City University of Hong Kong, said there was room for banks to cut interest rates given that interbank rates - representing the cost of bank funding on the wholesale money market - were low. 'The recovery of the Hong Kong economy could be delayed if lenders are unwilling to cut interest rates.'

South China Morning Post