In this Oct 24, 2008 photo, a pedestrian walks past the Hong Kong Monetary Authority's office in Hong Kong. HONG KONG The Hong Kong Monetary Authority HKMA raised its base rate by 25 basis points to 5.25 percent, hours after the US Federal Reserve hiked its rates through the overnight discount window.
Hong Kong's monetary policy moves in lock-step with the US as the currency of the special administrative region is pegged to the dollar in a tight range of 7.75 -- 7.85 per dollar.
The base rate is the interest rate that is used to calculate the discount rates for repurchase transactions through the discount window.
The base rate is currently set at either 50 basis points above the lower end of the prevailing target range for the US federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates HIBORs whichever is the higher, the HKMA said in a statement issued Thursday morning.
The Federal Reserve raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs after the collapse of two US banks.
The Federal Open Market Committee policy statement said that the US banking system is sound and resilient.