Hong Kong’s de facto central bank has cut its base interest rate for the second time this year, lowering the cost of funding to help reboot businesses and reduce the burden on mortgage borrowers.
The Hong Kong Monetary Authority (HKMA) cut the city’s base interest rate by a quarter percentage point to 5 per cent. Together with the half-percentage-point cut in September, Hong Kong’s key rate has fallen to a level last seen in February 2023.
Hours earlier, the US Federal Reserve said it would maintain its target rate in a range of 4.5 per cent to 4.75 per cent, following the seventh meeting of the Federal Open Market Committee (FOMC) this year. The rate-cut cycle is expected to last until next year.
The Fed’s decision was widely expected, with 97.5 per cent of traders anticipating the 25-basis-point reduction that the Fed delivered, while the rest expected no change, according to data compiled by CME Group, based on Fed fund futures contracts on Tuesday.
“This further recalibration of our policy stance will help maintain the strength of the economy and the labour market and will continue to enable further progress on inflation as we move toward a more neutral stance on time,” Fed chairman Jerome Powell said.
