Hong Kong central bank keeps base rate unchanged as Fed holds steady
Financial and monetary markets continue to operate in a smooth and orderly manner, says HKMA
[HONG KONG] The Hong Kong Monetary Authority (HKMA) left its base rate unchanged at 4.75 per cent on Thursday (Mar 20), in line with the US Federal Reserve’s decision to keep rates steady.
Major banks followed, with HSBC maintaining its best lending rate in Hong Kong at 5.25 per cent, and Standard Chartered keeping its Hong Kong dollar best lending rate unchanged at 5.5 per cent. Bank of China (Hong Kong) kept its Hong Kong dollar prime rate steady at 5.25 per cent.
Hong Kong’s monetary policy moves in lockstep with the US, as the city’s currency is pegged to the greenback in a tight range of 7.75 to 7.85 per US dollar.
The Fed kept its benchmark overnight interest rate unchanged in the 4.25 to 4.5 per cent range, and maintained its projection for two quarter-point interest rate cuts by year end. The Fed also forecast slower economic growth and higher inflation.
“Interest rates in Hong Kong might still remain at relatively high levels for some time, and the extent and pace of future US interest rate cuts are subject to considerable uncertainty,” HKMA said on Thursday.
The public should manage the interest rate risk when making property-purchase, mortgage or other borrowing decisions, it added.
Hong Kong financial and monetary markets have continued to operate in a smooth and orderly manner, said HKMA, adding that the market’s liquidity condition remains stable and the Hong Kong dollar exchange rate remains steady. REUTERS
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