The Monetary Authority of Macau raised its benchmark base rate by 25 bps to 2.75 percent on December 21st 2018 for the fourth time this year. As the pataca is linked to the Hong Kong dollar, the movements of policy rates in Hong Kong and Macao should be basically consistent in order to maintain the effective operation of the linked exchange rate system. As a result, the central bank followed its Hong Kong counterpart to raise the key rate, after the US Federal Reserve raised the Fed funds rate target range by 25 basis points on December 19th 2018. Interest Rate in Macau averaged 2.65 percent from 2000 until 2018, reaching an all time high of 8 percent in May of 2000 and a record low of 0.50 percent in December of 2008.
Interest Rate in Macau is expected to be 2.75 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Interest Rate in Macau to stand at 3.00 in 12 months time. In the long-term, the Macau Interest Rate is projected to trend around 3.50 percent in 2020, according to our econometric models.