Hong Kong interest rates could remain at relatively high levels for some time, says chief executive
THE Hong Kong Monetary Authority (HKMA) on Thursday (Dec 19) cut its base interest rate charged via the overnight discount window by 25 basis points to 4.75 per cent, tracking a move by the US Federal Reserve.
“The pace of (US) interest rate cuts remains uncertain as it is dependent on US inflation and labour market data developments, and economic activity may also be influenced by fiscal, economic and trade policies,” HKMA chief executive Eddie Yue told reporters.
Hong Kong’s financial and monetary markets continue to operate in a smooth and orderly manner, while market liquidity conditions remain stable and the Hong Kong dollar exchange rate is steady, Yue added.
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 to 7.85 per US dollar.
The Fed lowered its policy rate by a quarter of a percentage point, a decision Federal Reserve chair Jerome Powell described as a “closer call”, noting that the slower pace of projected rate cuts next year reflected higher inflation readings in 2024.
Yue added that Hong Kong interest rates could remain at relatively high levels for some time and the extent and pace of future interest rate cuts are subject to considerable uncertainty.
He urged consumers to make careful assessments of interest rate risks when making decisions about property purchases, mortgages or other types of borrowing. REUTERS
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