【AUD Fixed Deposits】Citigroup Expects Australia to Raise Rates by 0.25% on Tuesday; AUD Fixed Deposits Surge to Shocking 17% Interest Rate

This week officially marks the start of the central bank interest rate decision week, with seven major central banks taking turns to announce their rate decisions. The global focus is on “Super Thursday” (March 19), which includes the Federal Reserve and four other central banks’ rate decisions. Australia will be the first, with a rate meeting scheduled for tomorrow (17th). Major US banks are expected to make the second rate hike of the year, raising the policy rate to 4.1%. The Reserve Bank of Australia already led with a 0.25% increase on February 3rd. As for Australian dollar fixed deposits, HSBC, Bank of China Hong Kong, and Hang Seng Bank have surprised with quick rate hikes, increasing short-term deposit rates.

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The US dollar index has broken above 100, and last Friday (16th), the Australian dollar fell below 0.7, closing at 0.7018 today. It’s worth noting that the AUD has surged over 10% in the first three months of 2026, making it one of the strongest active currencies. However, Citibank analysts expect the currency to struggle to break through 0.72 for now, likely stalling around 0.71, with a potential upside of only about 1.1%. For those chasing yields at current levels, combined with medium- to long-term fixed deposit rates of 4%, the total return from the Aussie interest is only about 5%, not the over 10% seen earlier this year when buying at lower prices.

Citi’s investment strategist and asset allocation head, Liao Jiahao, predicts that the Reserve Bank of Australia (RBA) may raise rates by 25 basis points in March and May to 4.35%, maintaining restrictive levels in the second half of the year. The AUD/USD forecast for 3 months is 0.7, and for 6 to 12 months, 0.71.

The strength of the AUD already reflects its interest rate advantage. The expected increase in the next quarter is likely to slow significantly

Among commodity currencies, Citi remains most optimistic about the AUD. Liao Jiahao analyzes that the Citi analysts expect the RBA’s Monetary Policy Board (MPB) to hike by 25 basis points again at the May meeting. The board will have full first-quarter CPI data and February labor data, and may also learn key details about the federal budget. The RBA may shift its stance from neutral to hawkish in March, boosting expectations for a rate hike in May. Despite recent geopolitical tensions, the AUD/USD has not sharply reversed its upward trend and may find strong support around 0.69. However, given market positioning and expectations of further rate hikes by the RBA, it will be more difficult for the AUD to continue rising above 0.72.

Liao Jiahao forecasts the C$ at 1.41 in 3 months, with a target of 1.38 over the next 6 to 12 months; the long-term target is 1.39. The AUD is forecasted at 0.7, 0.71, and 0.7 respectively, while the NZD is expected at 0.59, 0.62, and 0.63.

HSBC last Friday aggressively increased Australian dollar fixed deposit rates to 15.5%

Recently, there has been a fierce competition among banks to raise AUD fixed deposit rates to attract customers. At least seven banks, including major Hong Kong and mainland banks, have preemptively increased rates. Notably, HSBC responded with a significant hike last Friday (13th), raising the 7-day short-term deposit rate by 1.5%, bringing the new rate to 15.5%.

Latest updates on AUD fixed deposit rates:

New offerings:

• Hang Seng launched a 7-day 17% quick deposit rate on February 22, valid until the end of March
• WeLab Bank offers (with high minimums) 3 months at 3.1%, 6 months at 3%, higher than lower entry thresholds by 0.1%

Rate hikes:

• Hang Seng today (16th) increased the 3-month rate by 0.1% to over 3%
• HSBC last Friday (March 13) sharply increased the 7-day rate by 1.5% to 15.5%; minimum HKD 2,000, available to “HSBC Premier Wealth Customers” via branches or phone banking, only for new qualified funds; valid until end of March
• Bank of China Hong Kong increased the 7-day rate by 0.8% to 13.8% on March 7
• CCB Asia increased rates across all terms: 1-year rate increased by 0.4% to break 4% at 4.05%
• Fubon Financial increased rates: 3 months up by 0.2% to 4.2%
• Public Bank increased rates: 3 months, 6 months, and 1 year all up by 0.3% to 2.3%
• CCB (Asia) increased 14-day rate by 0.1% to 3.5%

Rate reductions:

• Standard Chartered sharply cut the 7-day rate by 0.8% to nearly 13%

Bank of China Hong Kong raised short-term deposit rate to 13.8%, while Hang Seng Bank suddenly launched a 17% quick deposit rate, claiming the top spot

After a new round of rate adjustments, the Australian dollar’s leading position in deposit rates has caused a rare reshuffle. Hang Seng Bank’s sudden launch of a 7-day 17% rate surpasses CCB Asia’s 16.8%, making it the “number one.” For longer terms, despite Fubon’s aggressive increase of the 1-year rate to 3.85%, it still trails behind CCB Asia’s 4.05%, which remains the “long-term king.”

High-rate options for 7-day AUD deposits:

• Hang Seng 17% (launched Feb 23, redeemable for HKD 1 million, valid until March 31)
• CCB Asia 16.8%
• DBS 16% (reduced by 2% in January, available via branches)
• Hang Seng 15.8% (redeemable for HKD 1 million)
• HSBC 15.5% (added 1.5% on March 13, available via branches or phone banking for qualified new funds)
• Fubon 15.38% (reduced by 1.5% in June last year)
• Hang Seng 15% (launched quick deposit on Feb 23, redeemable for HKD 10,000, valid until end of March)
• CMB 13.88%
• Hang Seng (HKD 10,000), BOC HK (March 7, +1.8%) 13.8%
• HSBC 13% (liquid wealth rate)
• ICBC International and Nanyang Commercial Bank 12%
• DBS 11% (online account opening, reduced by 2% in January)

Other medium- to long-term high rates:

• 1 month: Fubon 5.38% (down 2.9% last year)
• 2 months: Fubon 3.75% (up 0.2% in March)
• 3 months: CCB Asia 6.88% (only for the first 25% of deposits, remaining 75% at 3.75%), Fubon 4.2% (up 0.2% in March)
• Half-year: Fubon 3.85% (up 0.2% in March)
• 1 year: CCB Asia 4.05% (up 0.4% this year)

Citi analyst Liao Jiahao predicts AUD at 0.71 in 6 months, advises buying on dips

The AUD repeatedly hits resistance at 0.71, and after overbought conditions, it has shown a clear correction. Two weeks after the Middle East crisis erupted, it broke below 0.7. Citi suggests low buying.

Expert forecasts for AUD:

• Liao Jiahao (Citi): Since the escalation of US-Iran conflict, the AUD/USD has fallen to around 0.6944–0.697 on March 3-5, attracting buying interest. Strong support likely remains near 0.6954.
• OCBC Hong Kong economist Wang Hao-ting: Hawkish signals from the RBA and rising inflation expectations; rate futures imply about a 70% chance of a rate hike tomorrow. Looking ahead, the AUD may outperform other currencies by 2026, with a range of 0.701 to 0.7168 over the next two weeks, and USD/HKD between 5.4847 and 5.608. Mid- and end-year targets are 0.73 (USD/HKD 5.7003).
• Technical levels: Recently, the AUD has repeatedly faced resistance around 0.71, struggling to break above the February 2023 high of 0.7158. RSI and stochastic indicators have fallen from overbought zones, indicating potential downside pressure. Watch 0.7 first, with the next support at the 50-day moving average around 0.694; resistance remains at 0.72.

Additionally, the Australian Treasury warns that oil prices have remained above $100 for three months. Even if prices fall quickly afterward, overall inflation in Australia is expected to rise by 0.5 percentage points to over 4% by June. However, Q2 GDP is only expected to be affected by 0.1 percentage points.

Australia’s rate turning point: last year, rates were frozen 8 times before the first hike on February 3rd this year, when the RBA increased by 0.25%, becoming the first G10 central bank to hike. The rate reached 3.85%, surpassing the Fed’s 3.5–3.75% for the first time since 2017. RBA Governor Michele Bullock said inflation rose again in the second half of last year and would remain above target for some time, which pushed the AUD up 1.05% to 0.7021 on that day.

Australia is the latest major central bank to hike, with only “hawkish rate cuts” last year—three cuts of 0.25% each in February, May, and August, totaling a 0.75% reduction to 3.6%. The easing cycle is now over.

Bank of America warns that rising inflation may force central banks to hike rates, potentially triggering stagflation

Additionally, over the weekend, US airstrikes in Iran escalated, with oil prices breaking above $100 for two consecutive days. Bank of America warns that current market conditions resemble the pre-2008 financial crisis signs.

• Goldman Sachs: Due to Iran conflicts, damage to Middle Eastern energy infrastructure, and the Strait of Hormuz blockade, Brent crude is expected to average over $100 per barrel in March, then fall back to $85 in April.
• Michael Hartnett, chief investment strategist at BofA: The current situation is reminiscent of the pre-2008 financial crisis, when oil prices doubled from July 2007 to August 2008 amid a credit crunch and financial turmoil. This year, oil prices have surged over 60% following US and Iran tensions, raising concerns about bank exposure to private credit, capital withdrawals, and AI-driven lending software companies. If Gulf tensions trigger inflation spikes, central banks may be forced to hike rates, risking stagflation.