The HKMA announced today (22nd) that the base rate will be raised to 3.50% according to a preset formula, with immediate effect.
The base rate is the base rate used to calculate the discount rate applicable when repurchasing transactions through the discount window.
The base rate is currently set at the lower end of the current target range for the US federal funds rate plus 50 basis points, or the average of the 5-day moving averages of overnight and 1-month HIBOR, whichever is higher.
The HKMA said that in response to the US raising the target range of the federal funds rate by 75 basis points on September 21 (US time), the current lower limit of the target range for the US federal funds rate plus 50 basis points is 3.50%, while overnight and one-month Hong Kong The average of the 5-day moving average of the interbank rate is 1.82%, so the base rate is set at 3.50% according to the default formula.
The Fed announced a rate hike of 0.75%, the third consecutive rate hike of 0.75%.
The bureau also expects to raise interest rates to 4.4% by the end of the year.