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Hong Kong central bank keeps key rate steady, tracking Fed move

By Reuters   |   Jun 13, 2024 at 12:27 AM EST
Hong Kong central bank keeps key rate steady, tracking Fed move

HONG KONG (Reuters) -The Hong Kong Monetary Authority (HKMA) left its base rate through the overnight discount window unchanged at 5.75% on Thursday, tracking a move by the U.S. Federal Reserve to leave rates unchanged.

The Federal Reserve held interest rates steady on Wednesday and pushed out the start of rate cuts to perhaps as late as December as policymakers sketched out their view of a U.S. economy that remains virtually unchanged across its major dimensions for years to come.

"With recent economic data showing mixed signs and inflation remaining high, when the Fed will start cutting interest rates is still uncertain," HKMA said in a statement, adding the high interest rate environment may last for some time.

HKMA said the financial and monetary markets of Hong Kong continued to operate in a smooth and orderly manner and the Hong Kong dollar exchange rate remains stable.

"The Hong Kong dollar interbank rates might remain high for some time," HKMA said, urging the public to carefully assess and manage the relevant risks when making property purchase, mortgage or other borrowing decisions.

HSBC Holdings said later on Thursday it had kept its best lending rate in Hong Kong at 5.875%.

Hong Kong's monetary policy moves in lock-step with the United States as the city's currency is pegged to the greenback in a tight range of 7.75-7.85 per dollar.

(Reporting by Donny Kwok; Editing by Michael Perry)

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