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Hong Kong lifts base rate to 2.25% after Fed hike

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Hong Kong lifts base rate to 2.25% after Fed hike

The Hong Kong Monetary Authority raised the base rate by 25 basis points to 2.25%, effective immediately, following the U.S. Federal Reserve's 25-basis-point rate hike June 13.

This is the second time the de facto central bank lifted rates in 2018, after a similar move March 22 in response to a Fed increase overnight.

The monetary authority must match the Fed's actions to maintain the Hong Kong dollar's peg to the U.S. dollar, the South China Morning Post said.

Hong Kong's commercial banks have maintained prime rates — which cover most mortgages, credit cards and personal loans in Hong Kong — at between 5% and 5.25% for the past 12 years, the newspaper said.