HONG KONG: Hong Kong's de-facto central bank lowered on Thursday its base interest rate charged via the overnight discount window by 25 basis points to 4.0%, tracking a cut by the U.S. Federal Reserve.
It was the third easing by the Hong Kong Monetary Authority (HKMA) this year and follows a similar cut late in October.
"An interest rate cut always has a positive impact on the economy and housing market," Eddie Yue, HKMA's chief executive, said in a press conference.
"However, the pace of future rate cuts remains quite uncertain, which may influence the interest rate environment in Hong Kong," Yue said, urging the public to carefully manage interest rate risks when making financial decisions.
Hong Kong's monetary and financial markets have continued to operate in an orderly manner, Yue added.
The Federal Reserve lowered the benchmark policy rate by a quarter of a percentage point in a widely expected move, but indicated it will likely pause its easing cycle at the next policy meeting in January.
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. - Reuters
