This file aerial photo taken on May 29, 2022 shows the International Finance Centre IFC in South China's Hong Kong. Local experts said they see signs of easing in the pressure of interest rate hikes on Hong Kong's stock and property market. PHOTO XINHUA Local experts said they see signs of easing the pressure on Hong Kong's stock and property market as the US Federal Reserve signaled it could pause interest rate hikes despite a quarter-point rate rise on Wednesday.
After the Federal ReserveFederal Reserve gave a rate hike of the same margin, the Hong Kong Monetary Authority raised its base rate by 25 basis points to a 15 year high of 5.25 percent.
The city's dominant lender HSBC said it will hold its prime rate unchanged at 5.625 percent.
Most commercial banks are expected to keep their best lending rate at the current level, given the Fed's less aggressive rate hike path, said Linus Yip Sheung-chiYip Sheung-chi, chief strategist at First Shanghai Securities.
The Fed s latest interest hike of 0.25 basis points was a widely expected move after a string of banking failures, spearheaded by the swift downfall of Silicon Valley Bank, said Yip.
After America's 16th biggest lender, California-based SVB, focused primarily on tech startups, was shut down by regulators this month after customers withdrawing their deposits caused a bank run.
Amid a dangerous decline in confidence in the global banking system, investment bank Credit Suisse was forced to be sold to rival Swiss bank UBS this week.
The easing of housing costs will speed up the decision of prospective buyers, as a result of the slowdown in the pace of US interest rate hikes, is a good news for Hong Kong property owners.
The Hong Kong dollar interbank rates, a benchmark used for pricing mortgages, may remain at elevated levels for some time, HKMA said in a statement. It warned that the public should take a prudent approach when making property purchases, taking out mortgages or making other borrowing decisions.
Hong Kong's stock market was up on Thursday after earnings optimism and the dovish Federal Reserve decision.
Commercial banks maintained their best lending rates, as well as a rise in the Hang Seng Index, which rose more than 2 percent.
READ MORE: Fed shifts toward pause on rate hikes, credit drawdown looming.
According to Andrew Wong Wai-hong, chairman and CEO of Anli Securities, he believes that the Fed may only lift its base rate once more this year, despite market expectations that the US policy rate will peak at 5 percent to 5.25 percent this year and will be maintained until at least 2024.
He said that the Hong Kong stock market outlook will not only depend on the Fed monetary policy but it can be seen that the rate hike's negative impacts are fading to a level that can be largely offset by other bullish indicators like the Chinese mainland's economic recovery as well as companies'financial performance.