Hong Kong's central bank raises base rate 25 basis points after Fed hike

HONG KONG: The Hong Kong Monetary Authority raised the base rate charged through its overnight discount window by 25 basis points on Thursday to 1.75 percent.

The move from Hong Kong's de facto central bank followed the Federal Reserve's decision to raise interest rates by a quarter of a percentage point in the third hike this year.

Hong Kong tracks US rate moves because its currency is pegged to the US dollar.

The monetary authority sets its base rate through a formula that is 50 basis points above the prevailing US Fed Funds Target or the average of the five-day moving averages of the overnight and one-month HIBORs (Hong Kong Inter-bank Offered Rate).