Hong Kong central bank cuts interest rate, tracking Fed move

[HONG KONG] The Hong Kong Monetary Authority (HKMA) lowered on Thursday (Dec 11) its base interest rate charged via the overnight discount window by 25 basis points to 4.0 per cent, tracking a cut by the US Federal Reserve.

It was the third easing by the HKMA this year and follows a similar cut late in October.

“An interest rate cut always has a positive impact on the economy and housing market,” said the central bank’s chief executive Eddie Yue at a press conference.

“However, the pace of future rate cuts remains quite uncertain, which may influence the interest rate environment in Hong Kong,” he said, urging the public to carefully manage interest rate risks when making financial decisions.

Hong Kong’s monetary and financial markets have continued to operate in an orderly manner, Yue added.

The US Federal Reserve lowered the benchmark policy rate by a quarter of a percentage point in a widely expected move on Wednesday, but indicated it will likely pause its easing cycle at the next policy meeting in January.

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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. REUTERS