Hong Kong Central Bank HKMA Maintains Interest Rate at 5.75%, Following US Fed Interest Rate Unchanged at 5.25% – 5.55% Range on 20th September 2023
4th May 2023 | Hong Kong
Hong Kong central bank Hong Kong Monetary Authority (HKMA) maintained Hong Kong key interest rate at 5.75%, following the United States Federal Reserve announcement of keeping interest rate unchanged at 5.25% to 5.5% range on 20th September 2023, and 0.5% above the lower end of the prevailing target range for the US federal funds rate is 5.75%. 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. HKMA: “The policy decision this time is generally in line with market expectations. The Fed stressed that its future interest rate decisions would continue to be dependent on the latest economic data and the impact of continual rate hikes during the past year on the economy. It is therefore premature to conclude whether the US rate hike cycle has been completed, and the high interest rate environment is likely to last for some time. The financial and monetary markets of Hong Kong continue to operate in a smooth and orderly manner. The Hong Kong dollar exchange rate remains stable, and the Hong Kong dollar interbank rates might remain high for some time. The public should carefully assess and manage the relevant risks when making property purchase, mortgage or other borrowing decisions. The HKMA will continue to closely monitor market developments and maintain monetary and financial stability.” See below for United States FOMC Meeting on 20th September 2023.
” Hong Kong Central Bank HKMA Maintains Interest Rate at 5.75%, Following US Fed Interest Rate Unchanged at 5.25% – 5.55% Range on 20th September 2023 “
Hong Kong Central Bank HKMA Maintains Interest Rate at 5.75%, Following US Fed Interest Rate Unchanged at 5.25% – 5.55% Range on 20th September 2023
FOMC: Recent indicators suggest that economic activity has been expanding at a solid pace. Job gains have slowed in recent months but remain strong, and the unemployment rate has remained low. Inflation remains elevated.
The U.S. banking system is sound and resilient. Tighter credit conditions for households and businesses are likely to weigh on economic activity, hiring, and inflation. The extent of these effects remains uncertain. The Committee remains 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 maintain the target range for the federal funds rate at 5-1/4 to 5-1/2 percent. The Committee will continue to assess additional information and its implications for monetary policy. In determining the extent of additional policy firming that may be appropriate to return inflation to 2 percent over time, 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 its previously announced plans. 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 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; Lisa D. Cook; Austan D. Goolsbee; Patrick Harker; Philip N. Jefferson; Neel Kashkari; Adriana D. Kugler; Lorie K. Logan; and Christopher J. Waller.
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