Hong Kong central bank raises interest rate after Fed hike

THE Hong Kong Monetary Authority (HKMA) on Thursday (Jul 28) raised its base rate charged through the overnight discount window by 75 basis points to 2.75 per cent, hours after the US Federal Reserve delivered a rate hike of the same margin.

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 Federal Reserve raised the benchmark overnight interest rate by three-quarters of a percentage point. The move came on top of a 75 basis point hike last month and smaller moves in May and March, as the Fed stepped up efforts to cool inflation.

Fed Chairman Jerome Powell told a news conference following the rate announcement that he did not believe the US economy is currently in a recession but that it is softening. REUTERS