The Hong Kong Monetary Authority (HKMA) on Wednesday lowered the Base Rate by 50 basis points to 1.5 percent, following the 50-basis point downward shift in the target range for the U.S. federal funds rate.
The U.S. Federal Open Market Committee decided Tuesday night to adjust downward the target range for the U.S. federal funds rate by 50 basis points to 1 to 1.25 pct.
Chief Executive of the HKMA Eddie Yue said the HKMA will continue to closely monitor market situation, and maintain orderly operations of Hong Kong's money and foreign exchange markets and will also ensure the stability of the Hong Kong dollar in accordance with the Linked Exchange Rate System.
The Base Rate is the interest rate forming the foundation upon which the Discount Rates for repurchase transactions through the Discount Window are computed.
It is currently set at either 50 basis points above the lower end of the prevailing target range for the U.S. federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is the higher.
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