|Published : 16 Mar 2017, 14:01:22|
HKMA raises base rate by 25 basis points
The Hong Kong Monetary Authority (HKMA) on Thursday raised the base rate charged through its overnight discount window by 25 basis points to 1.25 per cent.
The move from Hong Kong's de facto central bank followed the US Federal Reserve's decision to raise interest rates on Wednesday for the second time in three months.
The move spurred by steady economic growth of the country, strong job gains and confidence that inflation is rising to the central bank's target.
Hong Kong tracks US rate moves as its currency is pegged to the US dollar.
The monetary authority sets its base rate through a formula that is 50 basis points above the prevailing US Fed Funds Target or the average of the five-day moving averages of the overnight and one-month HIBORs (Hong Kong Inter-bank Offered Rate), according to Reuters.