Hong Kong central bank leaves interest rate unchanged

The Hong Kong Monetary Authority (HKMA) on Thursday left its base rate charged through the overnight discount window unchanged at 5.75 per cent, tracking a move by the U.S. Federal Reserve to keep rates steady.

The U.S. central bank held interest rates steady on Wednesday as policymakers paused its aggressive tightening of monetary policy to consider if conditions were restrictive enough to tame inflation.

HKMA said it is premature to conclude whether the U.S. rate hike cycle has been completed, and the high interest-rate environment is likely to last for some time.

“The Hong Kong dollar exchange rate remains stable, and the Hong Kong dollar interbank rates might remain high for some time,” HKMA said in a statement, adding that local financial and monetary markets continue to operate in a smooth and orderly manner.

The public should carefully assess and manage the relevant risks when making property purchase, mortgage or other borrowing decisions, HKMA said.

Hong Kong’s monetary policy moves in lock-step with the United States as the city’s currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.