Hong Kong central bank leaves interest rate unchanged, tracks US Fed

THE Hong Kong Monetary Authority (HKMA) on Thursday (Feb 1) left its base rate charged through the overnight discount window unchanged at 5.75 per cent, in line with the United States Federal Reserve’s decision to keep rates steady.

The Federal Reserve left interest rates unchanged on Wednesday and chair Jerome Powell said interest rates had peaked and would move lower in coming months, with inflation continuing to fall and an expectation of sustained job and economic growth.

“When will the Fed begin to cut rates and the interest rate path thereafter remain uncertain, and the high interest rate environment may last for some time,” HKMA said, adding the Fed’s future policy decisions will be dependent on incoming data, the evolving outlook and the balance of risks.

HKMA said the city’s financial and monetary markets continue to operate in a smooth and orderly manner while the Hong Kong dollar exchange rate remains stable though interbank rates might remain high for some time.

Hong Kong’s monetary policy moves in lock-step with the US as the city’s currency is pegged to the greenback in a tight range of 7.75 to 7.85 per dollar. REUTERS