HONG KONG :The Hong Kong Monetary Authority on Thursday raised its base interest rate by 50 basis points to 1.25 per cent, hours after the U.S. Federal Reserve delivered a rate hike of the same size, while major banks in the city left their rates unchanged.
Hong Kong's monetary policy moves in lock-step with the Fed's, as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar."The rate hike in the U.S. will not affect Hong Kong's financial and monetary stability," HKMA Chief Executive Eddie Yue told reporters, adding the Hong Kong dollar market had continued to operate in a smooth and orderly manner.
The Fed on Wednesday raised its benchmark overnight interest rate by half a percentage point, the biggest jump in 22 years, and said it would begin trimming its bond holdings next month as a further step in the battle to lower inflation.