Hong Kong raised base rate by 75 bp in lockstep with US Fed

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Hong Kong’s de facto central bank raised its base rate by a widely expected 75 basis points, hiking the rate for the sixth time in eight months in lockstep with the Federal Reserve’s tight monetary policy to tamp down inflation.

The base rate would rise to a fresh 14-year high of 4.25% with immediate effect, the Hong Kong Monetary Authority (HKMA) said on Thursday. Hours earlier, the Fed raised its target rate by the same quantum to between 3.75% – 4% to curb runaway inflation.

The HKMA has been conducting its monetary policy in lockstep with the Fed since 1983 to maintain the currency peg to the US dollar under the city’s linked exchange rate system.