Hong Kong central bank leaves interest rate unchanged, tracking Fed

A guard stands in front of the entrance to the Hong Kong Monetary Authority in Hong Kong. REUTERS/Bobby Yip/File photo

HONG KONG   -The Hong Kong Monetary Authority (HKMA) on Thursday left its base rate charged through the overnight discount window unchanged at 5.75 percent, tracking a decision by the U.S. Federal Reserve to keep rates steady.

The U.S. central bank held interest rates steady as expected at the end of a two-day policy meeting but projected another rate hike by year end and monetary policy significantly tighter through 2024 than previously expected.

READ: Chinese officials voice faith in economy and keep rates steady

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

HSBC Holdings also said it will keep its best lending rate in Hong Kong unchanged at 5.875 percent.

HKMA said it is premature to conclude whether the U.S. rate hike cycle has been completed while the high interest rate environment is likely to last for some time.

“The financial and monetary markets of Hong Kong continue to operate in a smooth and orderly manner,” HKMA said, adding the Hong Kong dollar exchange rate remains stable and the Hong Kong dollar interbank rates might remain high for some time.