MNI BRIEF: HKMA Chief Warns Of More Rate Hikes
Hong Kong Monetary Authority chief executive Eddie Yue on Thursday warned borrowers in the financial hub to brace for more rate hikes as the Federal Reserve telegraphed more tightening of U.S. monetary policy was coming.
“Manage your risks accordingly when making borrowing decisions” Yue said in a statement. He added that continued U.S. rate hikes “will not affect the financial and monetary stability of Hong Kong” and “our monetary and financial markets continue to operate in a smooth and orderly manner”
Yue's comments came after the HKMA raised rates by 75bp to 4.25% earlier in the day, tracking the overnight hike unveiled by the Fed. (SEE MNI BRIEF: HKMA Tracks Fed, Lifts Base Rate 75bp)
The HKMA mirrors U.S. monetary policy to maintain its Linked Exchange Rate System that pegs the Hong Kong dollar to the U.S. dollar. Today's warning comes as the Fed is widely expected to continue raising rates into 2023.