Hong Kong Central Bank Hikes Key Rate

(RTTNews) - Hong Kong's central bank raised its benchmark rate by a quarter-point on Thursday, in tandem with the decision of the U.S. Federal Reserve.

The Hong Kong Monetary Authority adjusted the Base Rate to 5.75 percent from 5.50 percent, with immediate effect.

On Wednesday, the U.S. Federal Reserve had raised the target range for the federal funds rate by 25 basis points to 5.25 to 5.50 percent. The midpoint of the target range hit the highest since early 2001.

Hong Kong's base rate is currently set at either 50 basis points above the lower end of the prevailing target range for the US federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is higher.

Following the 25 basis point increase by the Federal Reserve, 50 basis points above the lower end of the prevailing target range for the US federal funds rate was 5.75 percent, while the average of the five-day moving averages of the overnight and one-month HIBORs was 4.78 percent.

Accordingly, the pre-set formula fixed the Base Rate at 5.75 percent.