The Hong Kong Monetary Authority raised its benchmark rate by 25 basis points on Thursday, following the policy announcement of the U.S. Federal Reserve a day earlier.
The HKMA adjusted the Base Rate upward to 5.5 percent with immediate effect. The Federal Reserve had lifted the target range for the federal funds rate by 25 basis points to 5 to 5.25 percent, making the tenth straight rate hike.
Hong Kong's base rate is set at either 50 basis points above the lower end of the prevailing target range for the US federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is the higher.
After a quarter point hike by the Fed on Wednesday, 50 basis points above the lower end of the prevailing target range for the US federal funds rate is 5.5 percent, while the average of the five-day moving averages of the overnight and one-month HIBORs is 3.28 percent.
Accordingly, the pre-set formula fixed the Base Rate at 5.5 percent.
