Hong Kong Leaves Interest Rates Unchanged to Curb Inflation

The Hong Kong Monetary Authority (HKMA) left its benchmark interest rate at 5.75 per cent on Nov 2 through the overnight discount window after the US Federal Reserve stepped in to keep interest rates steady. The US Federal Reserve kept interest rates steady on Wednesday, pausing aggressive monetary tightening to assess whether conditions are restrictive enough to curb inflation. HSBC Holdings also said it would leave Hong Kong's main lending rate at 5.875 per cent.

According to the HKMA, it is premature to conclude whether the US interest rate cycle is over and whether the high-interest rate is likely to continue for some time.

“The exchange rate of the Hong Kong dollar remains stable, and the interbank exchange rates of the Hong Kong dollar may remain high for some time,” The HKMA said in a statement, adding that local financial and money markets will continue to operate smoothly and orderly.

The public should carefully assess and manage the relevant risks when making property purchases, mortgages 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.