Hong Kong Interest Rate

The Hong Kong Monetary Authority (HKMA) maintained its base rate unchanged at 4.75% on March 20, hours after the US Fed held steady its borrowing costs, as widely expected, following the second FOMC meeting of the year. Monetary policy in the Asian finance hub moved in line with the US as the local currency is pegged to the greenback. "Interest rates in Hong Kong might remain at relatively high levels for some time, and the extent and pace of future U.S. interest rate cuts are subject to considerable uncertainty," HKMA said in a statement. It added that the public should manage the interest rate risk when making property purchases, mortgages, or other borrowing decisions. The HKMA last cut the city’s interest rates by 25bps in December. For years, high rates have placed a burden on the city's economy. In Q4 of 2024, Hong Kong's GDP grew by 2.4%, recovering from the slowest rise in five quarters during Q3, amid a softer drop in private consumption and strength in service exports.