HKMA raises base rate by a quarter point to 4.25%, the first increase since 2023

The HKMA and US Federal Reserve lift key interest rates amid high inflation spurred by the Middle East conflict

Hong Kong’s de facto central bank increased its base rate by a quarter of a percentage point on Thursday after the US Federal Reserve raised the federal funds target range to rein in inflation amid conflict in the Middle East.

The Hong Kong Monetary Authority (HKMA) raised the city’s base rate to 4.25 per cent hours after the Fed lifted its target to a range of 3.75 per cent to 4 per cent after the sixth meeting of the Federal Open Market Committee (FOMC) this year.

They were the first rate rises by the Fed and the HKMA since July 2023, when they also increased them by a quarter of a percentage point.