US Federal Reserve eyes raising interest rates in the next few days.

The International Monetary Fund said stretched property valuations mean Hong Kong’s economy is vulnerable if interest rates rise faster than expected. In a report by Bloomber, IMF identified three main risks the city could be facing -- rising interest rates and potential global market volatility, China-linked stress, and a possible downturn in the property market.

With the U.S. Federal Reserve tipped to raise interest rates next week for only the second time in a decade, the higher borrowing costs will automatically flow through to Hong Kong, which effectively imports U.S. monetary policy because its currency is pegged to the greenback.

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