HKMA Follows Fed And Raises Base Rate To 2.25%

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2018-06-14 HKT 10:35

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  Norman Chan says he doesn't find it surprising that the US Fed continues to raise interest rates. Photo: RTHK

The Hong Kong Monetary Authority (HKMA) has raised the base lending rate for the second time this year, matching a move by the US Federal Reserve to raise its main interest rate by a quarter of a percentage point.

Hong Kong's base rate has been adjusted upward by 25 basis points to 2.25 percent with immediate effect.

The US Fed is also expecting to raise its interest rate another two times this year – after it adjusted its forecast for interest rate hikes to a total of four times within 2018 – one more than its earlier projection in March.

The chief executive of the HKMA, Norman Chan, said the Fed's adjustments aren't surprising, because the US economy continues to have solid growth, while the labour market there continues to tighten and inflation appears to be rising.

Chan added that he feels it's just a matter of time before local banks increase their savings deposit rates and their best lending rates.