H. Kong holds rates steady at 5.75%

The Hong Kong Monetary Authority (HKMA) maintained its base rate at 5.75 per cent on Thursday, aligning with the US Federal Reserve’s decision to keep rates unchanged, Reuters reported.

While the Fed signalled a future path towards lower borrowing costs, concerns about persistent inflation remain, potentially delaying rate cuts.

The HKMA acknowledged this uncertainty in its statement, highlighting that the high-interest rate environment might persist for a while.

Despite these concerns, Hong Kong’s financial markets continue to operate smoothly with the Hong Kong dollar remaining stable within its pegged range against the US dollar.

However, the HKMA anticipates interbank rates in Hong Kong dollars to stay elevated for some time.

This decision reflects the close link between Hong Kong’s and the US’s monetary policies, as the Hong Kong dollar is pegged to the US dollar. Following suit, HSBC Holdings, a major bank in Hong Kong, also maintained its best lending rate.