HONG KONG: The Hong Kong Monetary Authority (HKMA) on Thursday raised its base rate charged through the overnight discount window by 75 basis points (bps) to 3.5%, hours after the US Federal Reserve delivered a rate hike of the same margin.
HSBC said it would raise its best lending rate in Hong Kong by 12.5 bps to 5.125% from 5.0% effective Sept. 23, its first rate hike since September 2018.
“Anticipation around a potential prime rate increase in Hong Kong has been ripe and today’s announcement marks the beginning of an upward cycle,” Luanne Lim, HSBC’s chief executive for Hong Kong, said in a statement.
Hong Kong’s monetary policy moves in lock-step with the United States as the city’s currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.
The Fed delivered its third straight rate increase of 75 bps on Wednesday and signalled borrowing costs would keep rising, underscoring the US central bank’s resolve not to let up in its battle to contain inflation.
Hong Kong stocks close lower ahead of Fed decision
The HKMA’s move took its base rate to the highest since October 2008.
But Hong Kong’s finance chief said on Thursday he does not see a major risk to the city’s real estate market nor a need to adjust property control measures.
Comments
Comments are closed.