Breaking News
May 04, 2023 11:58 AM

Rates of the Hong Kong Central Bank increased by 25 BPs

Rates of the Hong Kong Central Bank increased by 25 BPs

Hours after the U.S. Federal Reserve announced a rate increase of the same margin, the Hong Kong Central Bank Authority increased its base rate charged through the overnight discount window by 25 basis points to 5.25% on Thursday.

As the city's currency is pegged to the dollar in a narrow range of 7.75 to 7.85 per dollar, Hong Kong's monetary policy moves in lockstep with the United States.

Although the Fed's decision to raise rates is consistent with market expectations, the US interest rate path will continue to be fraught with uncertainty, according to a statement from HKMA.

With the Fed's most recent rate hike, the HKMA predicted that Hong Kong interbank rates, which have been growing over the previous few months, will likely climb even more. As a result, the HKMA advised individuals to carefully consider the interest rate risk when making decisions about mortgages and other types of borrowing.

Yue stated the market is not just impacted by interest rate levels when commenting on the effect of the rate increase on the real estate market, one of the most expensive markets in the world.

"Investment sentiment in the real estate market has improved, and consumption power has increased," Yue said, adding that other economic variables also play a role. China and Hong Kong markets have now returned to normal following COVID-19.

Warning: All our services, breaking news, Signals, structures and analysis are focused solely for informational and educational purposes. Trading forex, stocks, futures, cryptos and others result in significant risk of loss and is not suitable for every investor and trader.