Hong Kong Holds Base Rate Steady at 4.75% After Fed Move

The Hong Kong Monetary Authority (HKMA) kept its base rate unchanged at 4.75% on June 19, mirroring the U.S.

Federal Reserve's decision to maintain its benchmark at 4.25%–4.50% for the fourth straight meeting despite pressure from President Trump to cut rates.

Both central banks are taking a cautious stance, monitoring the inflationary effects of Washington's tariffs ahead of the July 9 truce expiry.

HKMA's policy remains in step with the Fed due to the Hong Kong dollar's peg to the U.S.

currency.

The Hong Kong government has cautioned that trade policy uncertainty clouds the city's near-term economic outlook.

However, steady growth in China's economy and Hong Kong's push to diversify markets will provide support.

The special administrative region expanded by 3.1% year-on-year in Q1 2025, the strongest in five quarters, boosted by strong tourism and robust exports ahead of U.S.

tariff hikes.