Thursday, June 23, 2011

HKMA Holds Base Rate at 0.50% Following US FOMC

The Hong Kong Monetary Authority maintained 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%.  In a statement to the media the HKMA said: "We understand that QE2 will end in June as scheduled,"..."We have noticed that there is strong demand in Hong Kong dollar credit loans and therefore, Hong Kong dollar lending and deposit rates have some upward pressure."

The HKMA also maintained its base interest rate unchanged at 0.50% in April this year.  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 4.6% in April this year, up from 4.4% the previous month.


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