China’s Hong Kong Special Administrative Region increased interest rates at the same rate with FED.
In the statement made by the Hong Kong Monetary Authority (HKMA), which is the de facto central bank of the region, it was reported that 75 basis points increased the benchmark interest rate to 4.25 percent.
With its decision yesterday, the Fed increased the short-term policy rate by 75 basis points to the range of 3.75-4.00 percent.
The increase was the sixth rate hike decision taken by the US Federal Reserve this year. The Fed had increased interest rates by 25 basis points in March, 50 basis points in May, and 75 basis points each in June, July, and September.
The HKMA followed the Fed’s decision in all increases, raising the benchmark interest rate at the same rate.
After the increases, the interest rate in Hong Kong reached the highest level since the global financial crisis in 2008. The last time the benchmark interest rate in the region was 3.75 was in March 2008.
Since Hong Kong’s currency, the Hong Kong dollar, was anchored to the dollar peg in 1983; the region has followed the Fed’s footsteps in monetary policy.
In the last quarter of 2021, the tone of the Fed’s monetary policy began to change with the high inflation pressure that came with the rapid economic recovery after the Kovid-19 epidemic in the USA.
Inflation, which continued its upward trend with the effect of the Russia-Ukraine war and the policies aimed at controlling the Kovid-19 epidemic triggered by the Omicron variant in China, increased the problems in the supply chain and further increased the pressure on the Fed.
Inflation in the USA exceeded expectations despite reaching its highest level since November 1981 with an annual 9.1 percent in June, falling to 8.5 percent in July, 8.3 percent in August, and 8.2 percent in September. He continued to watch.
