In a synchronized effort with the US Federal Reserve’s policy shift, the Hong Kong Monetary Authority reduced its base interest rate by a quarter-point to 5% on Friday. This decision, due to the city’s currency peg to the US dollar, aims to provide much-needed support to an economy grappling with subdued spending.
The rate cut is anticipated to bring relief to businesses and homeowners burdened by high borrowing costs resulting from the Fed’s efforts to curb inflation. This has weighed heavily on Hong Kong’s housing market and overall economy, which experienced its slowest growth in five quarters.
Following the HKMA’s move, HSBC Holdings Plc, the city’s largest lender, and other banks are expected to disclose their prime lending rates later in the day.
