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HKMA: HK Interest Rates May Hover at High Lv. Still; Big Uncertainty in Future US Rate Cut, Pace
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The Federal Open Market Committee of the United States Federal Reserve (the Fed) announced to keep the target range for the federal funds rate unchanged at 4.25-4.5%. The policy decision is in line with market expectations, in the view of Hong Kong Monetary Authority (HKMA). However, the pace of future rate cuts remains uncertain as it is dependent on US inflation and labor market data developments, the effect of previous rate cuts, as well as the impact of fiscal, economic and trade policies adopted by the new administration on economic activity. In Hong Kong, its financial and monetary markets have continued to operate in a smooth and orderly manner. Market liquidity condition has remained stable, and the Hong Kong dollar exchange rate stays steady. Under the Linked Exchange Rate System, Hong Kong dollar interbank rates generally track the US dollar counterparts, while shorter-tenor interbank rates tend to be also influenced by the supply and demand of Hong Kong dollar funding in the local market such as seasonal effects as well as capital market activities. Interest rates in Hong Kong might still remain at relatively high levels for some time, and the extent and pace of future US interest rate cuts are subject to considerable uncertainty, said the HKMA. The public should carefully assess and continue to manage the interest rate risk when making property purchase, mortgage or other borrowing decisions. The HKMA will continue to closely monitor market developments and maintain monetary and financial stability. AAStocks Financial News |
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