HSBC raises lending rates by 0.125% after Hong Kong’s central bank raises rates

Major British bank HSBC Holdings (HSBC) raised its Hong Kong interest rate by 0.125% to 5.125%, effective Sept. 23, after the Hong Kong Monetary Authority (HKMA) today raised its benchmark rate by 0.75% to 3.5%.

The move came after the U.S. Federal Reserve (Fed) decided at its meeting on Wednesday (Sept. 21) to raise short-term interest rates by 0.75% to 3.00-3.25%, in line with market expectations.

The Bank of Hong Kong raised interest rates following the Fed to support the Hong Kong dollar, which is pegged to the U.S. dollar although commercial banks in Hong Kong have other methods for setting specific interest rates to delay interest rate adjustments following the Fed.

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