On Thursday, the Hong Kong Monetary Authority (HKMA) cut its interest rate by 50 basis points to 5.25%, following the U.S. Federal Reserve’s own cut.
Hong Kong’s policy was in complement with the United States, as the city’s currency is tied to the U.S. dollar at around 7.75-7.85 per dollar.
HKMA claims that the Fed interest cut would be beneficial to the Asia financial hub’s economy and help ease local interest rates too.
HKMA Acting Chief Executive Howard Lee spoke to the reporters that Hong Kong financial and monetary markets have continued to operate in an orderly manner, with market liquidity remaining stable and the Hong Kong dollar exchange rate still in the convertibility zone.
Lee added that the rate cut cycle has only begun, and interest rates will remain relatively high for the foreseeable future. People should continue to be careful with the interest rate risk when making a purchase, taking out mortgages, or other lending decisions.
Wednesday saw the U.S. central bank roll out an anticipated series of interest rate cuts with an initial 50 basis points rate cut. Moreover, policymakers expect another 50 bps cuts before the end of 2024.
