Hong Kong Central Bank Raises Interest Rate following US Fed’s Move

The Hong Kong Monetary Authority (HKMA) boosted its base rate charged through the overnight discount window by 50 basis points to 4.75% on Thursday, just hours after the US Federal Reserve raised rates by the same percentage.

The Federal Reserve of the United States increased interest rates by a half percentage point and forecast at least another 75 basis points in rises in borrowing costs by the end of 2023, along with an increase in unemployment and a near halting of economic growth.

Hong Kong’s monetary policy follows that of the U.S., as the city’s currency is tied to the dollar in a narrow band of 7.75-7.85 per dollar.