Hong Kong Central Bank HKMA Increases Interest Rate by 0.75% to 4.25%, Following US Fed Interest Rate Increase to 3.75% – 4% Range on 2nd November 2022
3rd November 2022 | Hong Kong
Hong Kong central bank Hong Kong Monetary Authority (HKMA) has increased Hong Kong key interest rate by 0.75% (Base Rate) to 4.25%, following the 0.75% upward adjustment in the target range for the US federal funds rate on 2nd November 2022, and 0.5% above the lower end of the prevailing target range for the US federal funds rate is 4.25% (The average of the five-day moving averages of the overnight and one-month HIBORs is 2.73%). The Base Rate is the interest rate forming the foundation upon which the Discount Rates for repurchase transactions through the Discount Window are computed. The Base Rate is currently set at either 50 basis points above the lower end of the prevailing target range for the US federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates (HIBORs), whichever is the higher. HKD is pegged to US dollar in the range of HKD 7.75 to 7.85 per dollar. See below for United States FOMC Meeting on 2nd November 2022.
“ Hong Kong Central Bank HKMA Increases Interest Rate by 0.75% to 4.25%, Following US Fed Interest Rate Increase to 3.75% – 4% Range on 2nd November 2022 “
United States Fed Increases Interest Rate by 0.75% to 3.75% – 4% Range, Target Inflation at 2%
FOMC: Recent indicators point to modest growth in spending and production. Job gains have been robust in recent months, and the unemployment rate has remained low. Inflation remains elevated, reflecting supply and demand imbalances related to the pandemic, higher food and energy prices, and broader price pressures. Russia’s war against Ukraine is causing tremendous human and economic hardship. The war and related events are creating additional upward pressure on inflation and are weighing on global economic activity. The Committee is highly attentive to inflation risks.
The Committee seeks to achieve maximum employment and inflation at the rate of 2 percent over the longer run. In support of these goals, the Committee decided to raise the target range for the federal funds rate to 3-3/4 to 4 percent. The Committee anticipates that ongoing increases in the target range will be appropriate in order to attain a stance of monetary policy that is sufficiently restrictive to return inflation to 2 percent over time. In determining the pace of future increases in the target range, the Committee will take into account the cumulative tightening of monetary policy, the lags with which monetary policy affects economic activity and inflation, and economic and financial developments. In addition, the Committee will continue reducing its holdings of Treasury securities and agency debt and agency mortgage-backed securities, as described in the Plans for Reducing the Size of the Federal Reserve’s Balance Sheet that were issued in May. The Committee is strongly committed to returning inflation to its 2 percent objective.
In assessing the appropriate stance of monetary policy, the Committee will continue to monitor the implications of incoming information for the economic outlook. The Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals. The Committee’s assessments will take into account a wide range of information, including readings on public health, labor market conditions, inflation pressures and inflation expectations, and financial and international developments.
Voting for the monetary policy action were Jerome H. Powell, Chair; John C. Williams, Vice Chair; Michael S. Barr; Michelle W. Bowman; Lael Brainard; James Bullard; Susan M. Collins; Lisa D. Cook; Esther L. George; Philip N. Jefferson; Loretta J. Mester; and Christopher J. Waller.
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