HKMA raises base rate by 25 basis points to 4.25% after Fed hike

The Hong Kong Monetary Authority raised its base rate by 25 basis points to 4.25 per cent on Thursday, following the US Federal Reserve's first rate increase in three years.

The move is in line with the HKMA's practice of tracking US monetary policy to maintain the Hong Kong dollar's peg to the US dollar.

Markets are now watching for adjustments by major Hong Kong banks, including HSBC and Standard Chartered, later on Thursday, particularly changes to their prime lending rates.

In Hong Kong, the prime rate serves as the pricing benchmark for mortgage loans, meaning banks can influence credit and borrowing demand through adjustments even when the base rate tightens.

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