Hong Kong central bank raises interest rate after Fed hike

THE Hong Kong Monetary Authority (HKMA) on Thursday raised its base rate charged through the overnight discount window by 25 basis points to 5.0 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.

In announcing its latest policy decision, the US central bank scaled back to a quarter-percentage-point rate increase after a year of larger hikes and Fed Chair Jerome Powell suggested a “couple” more hikes coming. REUTERS