Hong Kong Monetary Authority warns of continued interest rate uncertainty after US Federal Reserve holds rates at 3.5-3.75%

The Hong Kong Monetary Authority issued a response to the US Federal Reserve’s decision to keep the target range for the federal funds rate unchanged at 3.5-3.75%, noting the move was in line with market expectations and that the outlook for US monetary policy remains uncertain. Hong Kong’s monetary and financial markets have continued to operate in an orderly manner. Under the Linked Exchange Rate System, Hong Kong dollar interbank rates generally track US dollar counterparts, although shorter-tenor rates can also be affected by local Hong Kong dollar funding supply and demand, including seasonal factors and capital market activities. Given uncertainty in the future path of US interest rates and potential spillovers to Hong Kong’s interest rate environment, the HKMA urged the public to manage interest rate risks when making property purchase, investment, or borrowing decisions, and said it will continue to monitor market developments and maintain monetary and financial stability.