Friday, November 4, 2011

Hong Kong Monetary Authority Keeps Rate at 0.50%

The Hong Kong Monetary Authority kept its base interest rate unchanged at 0.50% following the decision of the US Federal Reserve to leave the fed funds rate unchanged at 0-0.25%.  The HKMA also previously held its base interest rate unchanged at 0.50%, after the FOMC met in September this year and announced rates would stay low until mid 2013.  The Hong Kong Monetary Authority generally tends to follow the monetary policy decisions of the US Federal Reserve's Federal Open Market Committee as the Hong Kong Dollar is fixed against the United States Dollar.  

Hong Kong reported consumer price inflation of 5.8% in September, compared to 5.7% in August, 7.9% in July, 5.6% in June, 5.2% in May and 4.6% in April this year.  Hong Kong's economy expanded 0.5% in Q2 this year, (2.8% in Q1), placing year on year GDP growth at 5.1% (7.5% in Q1).  The Hong Kong dollar is fixed against the U.S. currency at an exchange rate of between HK$7.75 and HK$7.85 per dollar; the USDHKD exchange rate last traded at 7.77


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