An evening view of the financial central district of Hong Kong, China Oct 3, 2023. REUTERS/Tyrone Siu. 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 move by the U.S. Federal Reserve to keep rates steady.
The U.S. central bank left interest rates unchanged on Wednesday and Fed chief Jerome Powell said the historic tightening of monetary policy is likely over as inflation falls faster than expected and with a discussion of cuts in borrowing costs coming “into view.”
HKMA said the market generally interpreted the Fed’s rate decision as interest rates nearing the peak, with a slightly larger extent of rate cuts next year than previously expected.
“There remains uncertainty in the interest rate path and the high interest rate environment may last for some time,” HKMA said in a statement, adding the city’s financial and monetary markets continue to operate in a smooth and orderly manner.
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“The Hong Kong dollar exchange rate remains stable, and the Hong Kong dollar interbank rates might remain high for some time,” HKMA said, urging the public to manage the relevant risks when making property purchase, mortgage or other borrowing decisions.
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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.