The Hong Kong Monetary Authority (HKMA) raised its base interest rate by 25 basis points to 4.25% on Thursday, following the US Federal Reserve’s latest rate increase.
The HKMA’s base rate, which is charged through its overnight discount window, was raised shortly after the Fed lifted its benchmark rate by 25 basis points to 3.75% to 4.00% on Wednesday.
Hong Kong’s monetary policy generally moves in line with US interest rates because the Hong Kong dollar is pegged to the US dollar within a range of 7.75 to 7.85 per US dollar.
The Fed’s latest rate hike was its first in more than three years, with US policymakers signalling that another increase could follow before the end of 2026 as inflation remains elevated.
The HKMA’s move keeps Hong Kong’s interest rate settings aligned with the US as the city’s currency peg remains the foundation of its monetary policy framework.
Reuters
