Hong Kong de facto central bank cuts interest rate, tracking Fed move

The Hong Kong Monetary Authority on Thursday cut its base interest rate charged via the overnight discount window by 25 basis points to 4.5 percent, tracking a move by the US Federal Reserve.

It is the first cut in nine months since the city's de facto central bank lowered the rate by 25 basis points on December 19, 2024.

The Federal Reserve cut interest rates by a quarter of a percentage point on Wednesday and indicated it will steadily lower borrowing costs for the rest of this year.

Hong Kong's monetary policy moves in lock-step with the United States as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

The HKMA chief executive Eddie Yue Wai-man said the Fed might cut rates further by 50 basis points before the end of the year, though he added that "the extent and pace of future US interest rate cuts are subject to uncertainty".

Reuters