HONG KONG (Reuters) – Hong Kong’s central bank on Thursday lowered its base interest rate charged via the overnight discount window by 25 basis points to 4.50%, tracking a cut by the U.S. Federal Reserve.
It was the first cut by the Hong Kong Monetary Authority since a 25 basis point cut last December.
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.
HKMA Chief Executive Eddie Yue said the reduction will have a positive impact on the city’s property market and economy, noting that financial and monetary markets continue to operate in a smooth and orderly manner.
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.
Yue 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 U.S. interest rate cuts are subject to uncertainty”.
(Reporting by Donny Kwok; Editing by Kim Coghill and Edwina Gibbs)
