Hong Kong central bank raises rate after Fed hike

HONG KONG  – The Hong Kong Monetary Authority (HKMA) on Thursday raised its base rate charged through the overnight discount window by 25 basis points to 5.25 percent, hours after the U.S. Federal Reserve delivered a rate hike of the same margin.

Hong Kong’s monetary policy moves in lock-step with the U.S. as the city’s currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

The Federal Reserve on Wednesday raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs after the recent collapse of two U.S. banks.

The Federal Open Market Committee policy statement also said the U.S. banking system is “sound and resilient”.

US Fed lifts key interest rate amid banking sector fears