Hong Kong Interest Rate

The Hong Kong Monetary Authority (HKMA) kept its base rate unchanged at 4.75% on January 30, hours after the US Federal Reserve maintained its borrowing costs, as widely expected, following three rate reductions in 2024. Monetary policy in the Asian finance hub moved in line with the US as the local currency is pegged to the greenback. The HKMA last cut the city’s interest rates by 25bps in December. The central bank said in a statement that interest rates in Hong Kong might remain at relatively high levels for some time, and the extent and pace of future US interest rate cuts are subject to considerable uncertainty. It added that the public should assess and continue to manage the interest rate risk when making property purchase, mortgage, or other borrowing decisions. For years, high rates have placed a burden on the economy. In Q3 of 2024, Hong Kong's GDP grew by 1.8%, the least in five quarters, amid a further drop in private consumption and moderation in goods exports.