The Hong Kong interbank rate (HIBOR) should trade close to the US SOFR rate under normal circumstances due to HKD’s peg to the USD. But since the steep appreciation of TWD in May, HIBOR has decoupled from SOFR. The yield differential with the US is already quite substantial and the interest rate arbitrage of buying higher-yielding USD funded by lower-yielding HKD has not been able to close the interest rate gap for more than a month now, perhaps reflecting the very strong desire to sell the dollar in Asia.