HKMA raises base rate to 4.25% after US Fed hike

The rate underpins pricing for discount window repurchase transactions. 

The Hong Kong Monetary Authority (HKMA) has increased the base rate to 4.25% with immediate effect, following a rise in US interest rates. 

The move followed the 25-basis-point upward shift in the target range for the US federal funds rate on 16 September.

The base rate is used as the foundation for calculating discount rates for repurchase transactions through the HKMA’s discount window.  

Under the current mechanism, the rate is set at either 50 basis points above the lower end of the prevailing US federal funds target range or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is higher.