The Hong Kong Monetary Authority (HKMA) maintained Hong Kong's base rate at 4% on Thursday, following the US Federal Reserve's decision to keep its target rate range steady at 3.5% to 3.75% [1]. The HKMA warned that future US interest rate movements remain uncertain, noting, "The future trend of US interest rates is quite uncertain, which may influence the interest-rate environment in Hong Kong," according to an official statement [1].
The HKMA said current US rate decisions are influenced by tensions in the Middle East, which have pushed up oil prices and affected US inflation levels [1]. It advised the public to "carefully manage interest-rate risks when making decisions about property purchase, investment or borrowing" amid the volatile environment [1].
Major local lenders HSBC, Standard Chartered and Bank of China (Hong Kong) all kept their prime and savings rates unchanged in response to the steady base rate [1]. Market analysts noted that the inflationary impact of the ongoing US-Israel conflict with Iran has lessened the likelihood of an interest rate cut this year, reducing expectations for monetary easing [1].
The HKMA's decision aligns closely with the US Federal Reserve's move to hold rates steady, reflecting the close linkage between Hong Kong's monetary policy and US interest rate trends. The HKMA plan to monitor the global geopolitical situation and inflation developments as it manages the territory's interest rate policy [1].
