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The Hong Kong Monetary Authority has adapted to the rate hike announced by Jerome Powell’s Fed, with a monetary tightening of 50 basis points to 4.75%.
The move is explained by the Hong Kong dollar’s peg to the US dollar, which has been going on for about 40 years, which sees the Hong Kong dollar moving within a range against the greenback.
The Hong Kong Monetary Authority’s announcement follows that of the Fed, which yesterday raised federal funds rates by 50 basis points to a new range of between 4.25% and 4.5%.
The monetary tightening, smaller than the previous four consecutive rate hikes of 75 basis points, brought US rates to a 15-year record.