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Hong Kong Monetary Authority Follows the Fed, Raises Interest Rates by 0.25%

The Hong Kong Monetary Authority (HKMA) has raised its policy rate by 0.25% to 5.0% after the Federal Reserve raised its interest rate by 0.25% at its meeting yesterday. The Hong Kong dollar, which is tied to the US dollar, requires the HKMA to pursue monetary policy in line with the Fed.

The Federal Reserve Board voted to increase interest rates to a range of 4.50-4.75% during its meeting, while Fed Chair Jerome Powell stated that inflation in the US appears to be slowing down and disinflationary conditions are starting to emerge.

This interest rate hike by the HKMA is a direct response to the Federal Reserve’s decision to increase interest rates, reflecting the close relationship between the two monetary authorities and the Hong Kong dollar’s link to the US dollar.

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