HONG KONG, Nov 24 (Reuters) - Dollar funding rates were steady on Monday but traders and analysts expect a scramble for funds ahead of the month- and year-end, with concerns about Citigroup and a looming recession also clouding the outlook.

Interbank overnight dollar deposit rates were quoted at around 0.4 percent in Hong Kong, 0.4-0.7 percent in Kuala Lumpur and at about 0.9 percent in Seoul, barely changed from Friday.

“Liquidity is slightly tight for term money. This will be a rocky week, because it is the final week before the month end,” said Suresh Ramanathan, Kuala Lumpur-based strategist with CIMB Investment Bank.

He said rates could come under upward pressure because of the year-end too.

“December is usually thin, so for all those guys who did not get sufficient dollars, this is probably the last chance,” he added.

Three-month dollar deposit rates were quoted at 2.25-2.50 percent in Hong Kong, at 3.40-3.70 percent in Kuala Lumpur and 2.25-2.75 percent in Seoul.

While money market rates have retreated from their recent highs, there are concerns liquidity conditions could tighten again amid fresh worries about Citigroup (C.N: Quote, Profile, Research, Stock Buzz) and with prospects for a recession remaining undiminished.

Doubts about Citigroup’s ability to survive remained a major factor for global markets, as the U.S. lender struggles with mounting losses from credit cards, mortgages and toxic debt.

The U.S. government agreed to a $306 billion rescue plan for Citigroup, under which it would shoulder some losses from toxic debt in the latest attempt to bolster a financial services industry in turmoil. [ID:nN24499982]

And although markets reacted positively to this announcement, analysts do not expect the euphoria to last.

“Risk appetite is still fragile … even with the Citigroup bailout, in the near term it reduces systemic risk, but it does raise questions about what it means for the industry longer term,” said David Forrester, strategist with Barclays Capital.

In South Korea, the central bank’s decision to inject 5 trillion won ($3.35 billion) into a proposed 10 trillion won fund aimed at easing a local credit crunch by buying bonds from companies and commercial bank had a marginal impact.

Traders said the announcement was widely expected after the South Korean financial regulator proposed the bond fund earlier this month.

The one-week money market rate <KIKRW1WD=> was steady at 4.10 percent while the 2-month <KIKRW2MD=> and 3-month <KIKRW3MD=> rates both declined by 1-2 basis points.

In Hong Kong, short-dated rates eased marginally because of the large aggregate balance in the banking system after recent fund injections by the Hong Kong Monetary Authority. But funds for longer maturities were steady.

The one-month local interbank offered rate <HKD1M=> was fixed at 0.90357 percent at 0315 GMT, down 5.4 basis points from Friday. The three-month Hibor <HKD3M=> was fixed at 1.95071 percent, compared with 1.95000. (Reporting by Umesh Desai; Editing by Neil Fullick)

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