Hong Kong central bank raises interest 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 5.75 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 United States as the city’s currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

The Federal Reserve raised interest rates by a quarter of a percentage point and Fed Chair Jerome Powell said the economy still needed to slow and the labor market to weaken for inflation to “credibly” return to the U.S. central bank’s 2 percent target.

READ: Fed raises interest rates, leaves door open to another increase