MNI BRIEF: HKMA Lifts Base Rate After Fed Hike
Hong Kong’s base interest rate was increased 25bp to 5.25% on Thursday, according to the Hong Kong Monetary Authority (HKMA).
The second hike this year follows the Federal Reserve's decision to lift U.S. interest rates by the same amount. (SEE MNI BRIEF: Fed Considered Pausing Rate Hikes At March Meeting - Bonds & Currency News | Market News).
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 government's economic outlook for 2023 forecasts GDP growth of 3.5% to 5.5%, as a drop in demand for exports in advanced economies will be offset by re-opening with the mainland. Exports from Hong Kong dropped 36.7% y/y in January, the seventh consecutive month of decline. MNI BRIEF: HK Exports Slide In January