Hong Kong raises base rate 25 bps following Fed hike

    The Hong Kong Monetary Authority (HKMA), the de-facto central bank of Hong Kong, raised its base rate by 25 basis points to 0.75 percent following the U.S. Federal Reserve's rate hike.
    The HKMA has a fixed peg exchange rate system to the U.S. dollar and sets the base rate 50 basis points above the target of the U.S. federal funds rate or the average of the overnight and one-month Hong Kong Interbank Offered Rates, whichever is the higher.
     Hong Kong's peg to the U.S. dollar has been called into question by many observers as China's yuan gains growing international use and someday will be fully convertible.
    The Hong Kong dollar was trading at 7.75 to the U.S. dollar today.