HKMA raises its base rate to 5.00%
The new rate took effect on 2 February.
The Hong Kong Monetary Authority (HKMA) has raised its base rate to 5.00% in response to the US Fed’s recent 25-basis points (bps) hike.
The city central bank’s new rate took effect on 2 February. Last 15 December, the central bank increased its rate to 4.75%.
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 5.00%, whilst the latter was 2.05%, thus the base rate was set at 50bps above the lower end of the prevailing target range for the US Fed rate.