H. Kong holds rates steady amid US Fed decision

The Hong Kong Monetary Authority (HKMA) kept its base rate unchanged at 5.75 per cent on Thursday, mirroring the decision by the US Federal Reserve.

The US Fed held interest rates steady on Wednesday, delaying potential rate cuts until possibly December.

This wait-and-see approach, due to mixed economic data and persistent inflation, prompted the HKMA to maintain Hong Kong’s base rate.

The HKMA reassured the public that Hong Kong’s financial and monetary markets remain stable, with the Hong Kong dollar exchange rate holding firm within its pegged range.

It also urged residents to carefully assess borrowing risks associated with high interest rates, particularly for property purchases and mortgages.

Following the HKMA’s lead, HSBC Holdings, a major bank in Hong Kong, maintained its best lending rate at 5.875 per cent.

Hong Kong’s monetary policy is closely tied to the US due to the Hong Kong dollar’s peg to the US dollar. This peg keeps the Hong Kong dollar within a narrow band of 7.75 to 7.85 Hong Kong dollars per US dollar.

Attribution: Reuters