China’s Hong Kong Special Administrative Region increased its benchmark rate at the same rate due to the exchange rate regime tied to the US dollar.
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 50 basis points increased the benchmark interest rate to 4.75 percent.
The US Federal Reserve, with its decision yesterday, increased the short-term policy rate by 50 basis points to the range of 4.25-4.50 percent. After the Fed’s seventh rate hike decision this year, the interest rate reached its highest level in the last 15 years.
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, September, and November.
The HKMA followed the Fed’s decision in all increases, raising the benchmark interest rate at the same rate.
Since Hong Kong’s currency, the Hong Kong dollar was pegged to the US dollar in 1983, and the region has followed the Fed’s footsteps in monetary policy.
HKMA Chief Executive Eddie Yue Wai-ma pointed out that inflation is still above the Fed’s 2 percent target, so that the interest rate may rise further. Should carefully consider their decisions.” he said.
