The Hong Kong Monetary Authority (HKMA) announced on Thursday that the benchmark interest rate for the overnight discount window would remain unchanged at 5.75%, following the U.S. Federal Reserve's decision to keep rates steady.
The Federal Reserve decided on Wednesday to keep rates unchanged and suggested that the timing for the start of rate cuts may be pushed back to December, as policymakers believe that the key indicators of the U.S. economy will remain nearly stable in the coming years.
In a statement, the HKMA said, "Due to recent economic data showing mixed signals and persistent high inflation, it is uncertain when the Federal Reserve will start cutting rates." The statement also noted that the high interest rate environment might persist for some time.
The HKMA stated that Hong Kong's financial and monetary markets continue to operate smoothly and orderly, and the Hong Kong dollar exchange rate remains stable.
"Hong Kong's interbank rates may remain high for a period of time," the HKMA said, urging the public to carefully evaluate and manage related risks when making property purchases, mortgages, or other borrowing decisions.
HSBC Holdings subsequently announced on Thursday that its best lending rate in Hong Kong would remain at 5.875%.
As Hong Kong's monetary policy remains in sync with that of the United States, the city's currency is linked to the U.S. dollar, maintaining an exchange rate within the narrow range of 7.75 to 7.85 HKD per 1 USD.
