Hong Kong Central Bank Raises Rate By 75 Bps

(RTTNews) - The Hong Kong Monetary Authority raised its base rate by 75 basis points after the rate hike decision of the U.S. Federal Reserve.

The HKMA adjusted upward the base rate to 2.00 percent with immediate effect according to a pre-set formula.

The Base Rate is currently set at either 50 basis points above the lower end of the prevailing target range for the US federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is the higher.

The Federal Reserve on Wednesday raised the target rate for the federal funds rate by 75 basis points to 1.50 to 1.75 percent, which was the biggest rate hike since 1994.

After the Fed move, 50 basis points above the lower end of the prevailing target range for the US federal funds rate was 2.00 percent, while the average of the five-day moving averages of the overnight and one-month HIBORs was 0.20 percent.

The Base Rate was therefore set at 2.00 percent according to the pre-set formula.