China’s Hong Kong Special Administrative Region increased its benchmark interest rate at the same rate due to the exchange rate regime tied to the US dollar, after the US Federal Reserve (Fed) increased its policy rate by 25 basis points during the week.
The US Federal Reserve had increased the short-term policy rate by 25 basis points to the range of 4.75-5 percent on March 22. Following the Fed ‘s second rate hike decision this year, the interest rate reached its highest level in 16 years.
The Fed had increased the interest rate by 25 points in February, and the HKMA had followed the Fed’s decision and increased the benchmark interest rate at the same rate.
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Hong Kong banks did not change their minimum loan interest rates despite the increase. HSBC and Bank of China, the three big banks that perform the task of printing money in the special administrative region where there is no central bank, kept the lowest annual loan interest rate at 5,625, and Standard Chartered at 5,875.
