The Bank of Hong Kong (HKMA) raised its policy rate by 0.50% to 1.25% today after the Federal Reserve raised its interest rate by 0.50% at its meeting on May 4.
In the past, the Bank of Hong Kong will adjust its monetary policy in line with the Fed. This is because the Hong Kong dollar is tied to the US dollar in a frame of 7.75-7.85 HKD/US dollar.
Many of the major banks in Hong Kong have kept their lending and deposit rates unchanged. This includes HSBC Bank and Standard Chartered Bank.
Fed rate hike won’t affect Hong Kong’s financial stability. The Hong Kong dollar market continues to run smoothly and in an orderly fashion,
a Hong Kong’s central bank governor said.