Southeast Asia Information Port (www.dnyxxg.com) – In response to the US Federal Reserve's 25 basis point cut to the target range for the federal funds rate to between 3.50% and 3.75%, the Hong Kong Monetary Authority (HKMA) lowered its base rate on the discount window to 4% on November 11, effective immediately, following established procedures.
HKMA Chief Executive Eddie Yue stated that Hong Kong's economy has performed well in recent quarters, with strong exports and consumption, and stable capital and property markets. He believes that the Hong Kong economy is influenced by multiple factors, and the interest rate cut has a positive effect on the economy.
Yue noted that Hong Kong's monetary and financial markets have maintained orderly operation. Under the linked exchange rate system, Hong Kong dollar interbank rates generally converge with US dollar interest rates, while shorter-term interbank rates are also affected by the supply and demand of Hong Kong dollar funds in the local market, such as seasonal factors like year-end settlements and capital market activity.
He said the Federal Reserve's decision to lower interest rates was largely in line with market expectations. The dot plot indicates the Fed may cut rates by another 25 basis points by 2026, but significant uncertainties remain regarding inflation trends and the job market, so the future direction of monetary policy remains to be seen. (End)
