30.10.202500:01:22UTC+00Hong Kong Cuts Base Rate by 25bps to 4.25% After Fed Move

The Hong Kong Monetary Authority (HKMA) reduced its base rate by 25 basis points to 4.25% on October 30. This decision mirrors the U.S. Federal Reserve's recent rate cut and represents the lowest rate seen since November 2022. This marks the second rate reduction by the HKMA this year, following a similar cut in September. The base rate, implemented via the overnight discount window, highlights Hong Kong's alignment with U.S. monetary policy due to its currency being closely linked to the U.S. dollar. This rate cut was announced prior to the release of Hong Kong's GDP data for the third quarter. During the second quarter, Hong Kong's economy experienced a year-on-year growth of 3.1%, driven by strong export performance and increased domestic demand. Nevertheless, the government has expressed concerns that ongoing uncertainties in trade policies may impact investment levels and cross-border trade activities.