HKMA Stays Put on Base Rate as US Fed Keeps Interest Rates Steady

The Hong Kong Monetary Authority (HKMA) has left its base rate unchanged at 4 percent following the Federal Reserve's decision to keep interest rates on hold. The Fed's Federal Open Market Committee voted 9-3 to maintain the target range for the federal funds rate at 3.5-3.75 percent, despite some members calling for a quarter-percentage-point hike.

The HKMA stated that its policy decision aligns with market expectations and noted that economic activity in the US is expanding at a solid pace, while inflation remains elevated. The authority also emphasized the importance of managing interest rate risks when making decisions about property purchases, investments, or borrowing.

Under the Linked Exchange Rate System, Hong Kong dollar interbank rates generally track their US dollar counterparts, while shorter-tenor interbank rates are influenced by the supply and demand of Hong Kong dollar funding in the local market.