HONG KONG (Reuters) -The Hong Kong Financial Authority (HKMA) on Thursday reduce its base fee charged through the in a single day low cost window by 50 foundation factors to five.25%, monitoring a transfer by the U.S. Federal Reserve.
Hong Kong’s financial coverage strikes in lock-step with america as the town’s forex is pegged to the dollar in a decent vary of seven.75-7.85 per greenback.
HKMA mentioned the U.S. rate of interest reduce may have a constructive impression on the economic system of the Asia monetary centre and can present some room for relieving of native rates of interest.
“In Hong Kong, our monetary and financial markets have continued to function in a clean and orderly method. Market liquidity situation has remained steady with the Hong Kong greenback change fee hovering inside the convertibility zone,” HKMA Appearing Chief Govt Howard Lee advised reporters.
“The speed reduce cycle has simply begun, rates of interest will stay at comparatively excessive degree within the foreseeble future. The general public ought to fastidiously assess and proceed to handle the rate of interest threat when making property buy, mortgage or different lending choices,” Lee added.
Hong Kong main banks adopted with HSBC slicing its finest lending fee within the metropolis by 25 foundation factors to five.625% efficient Sept. 20, and Financial institution of China (Hong Kong) mentioned it could reduce its Hong Kong prime fee to five.625% from 5.875% efficient Sept. 23.
“Regardless that uncertainty about future U.S. rates of interest nonetheless exists, the route is turning into clearer. Hong Kong rates of interest are anticipated to ease accordingly and that can assist help Hong Kong financial development,” Financial institution’s chief economist Thomas Shik mentioned.
On Wednesday, the U.S. central financial institution kicked off an anticipated sequence of rate of interest cuts with a larger-than-usual half-percentage-point discount and policymakers see one other 50 foundation factors of cuts in 2024.
“Decrease charges are intuitively constructive for actual property however may have an uneven impression throughout Asia property markets and shares,” Morgan Stanley mentioned in a analysis observe, including falling mortgage charges would provide better help to Hong Kong than Singapore.