HKMA raises its base rate to 3.50%
The new rate took effect on 22 September.
The Hong Kong Monetary Authority (HKMA) has raised its base rate to 3.50% in response to the US Fed’s recent 75-basis points (bps) hike on 21 September.
The city central bank’s new rate took effect on 22 September. Last 28 July, the central bank increased its rate to 2.75%.
According to HKMA's pre-set formula, the base rate is set either at 50bps above the lower end of the prevailing target range for the US Fed rate, or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates (HIBORs), whichever is the higher.
The former was 3.50%, whilst the latter was 1.82%, thus the base rate was set at 50bps above the lower end of the prevailing target range for the US Fed rate.