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MNI BRIEF: HKMA Hikes Base Rate 50bp; Tracks Fed

MNI (BEIJING)
MNI (Beijing)

Hong Kong’s Base Rate was increased 50bp to 4.75%, the highest rate since January 2008, according to the Hong Kong Monetary Authority (HKMA) on Thursday.

The rate hike followed the Federal Reserve's decision to lift U.S. interest rates by the same amount on Wednesday. It was the seventh hike this year. (See MNI FED WATCH: Powell Promises Tighter Policy, Held For Longer)

The HKMA mirrors U.S. monetary policy moves to maintain its Linked Exchange Rate System that pegs the Hong Kong dollar to the U.S. dollar. The currency peg was recently defended by HKMA Chief Executive Eddie Yue, who said hedge fund speculators will lose money if they bet on the peg breaking. (SEE MNI Brief: Hong Kong Dollar Speculators Will Fail - HKMA CEO)

MNI Beijing Bureau | lewis.porylo@marketnews.com
MNI Beijing Bureau | lewis.porylo@marketnews.com

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