HKMA raises its base rate to 2.75%

The new rate took effect on 28 July.

The Hong Kong Monetary Authority (HKMA) has raised its base rate to 2.75% in response to the US Fed’s recent 75-basis points (bps) hike.

The central bank’s new rate took effect on 28 July.

In an announcement, HKMA explained that its base rate is set either at 50bps above the lower end of the prevailing target range for the US Fed rate, or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates (HIBORs), whichever is the higher.

The former was 2.75%, whilst the latter was 0.79%, thus the base rate was set at 50bps above the lower end of the prevailing target range for the US Fed rate.

READ MORE: Rising interest rates to be Hong Kong banks’ saving grace