Macau Cuts Base Rate by 25bps After Fed Decision

The Macau Monetary Authority slashed its base rate by 25 basis points to 4% on December 11, 2025, following the move by the Hong Kong Monetary Authority (HKMA) after the US Federal Reserve cut interest rates. It was the third rate cut this year in the Chinese special administrative region, bringing borrowing costs to their lowest level since October 2022. The decision came amid moderating unemployment, which fell to 1.7% in October, the lowest since January. Meanwhile, GDP grew 8% year-on-year in Q3 2025, the strongest expansion since Q1 2024. However, the annual inflation rate accelerated to 0.6% in October, the fastest pace in 14 months. Under the linked exchange rate system, Macau’s base rate is set at par with Hong Kong’s base rate, which is typically 50 basis points above the lower end of the target range for the US federal funds rate.

The Macau Monetary Authority lowered its base rate by 25 basis points to 4.25% on October 30, 2025, mirroring the move by the Hong Kong Monetary Authority (HKMA) after the US Federal Reserve cut interest rates. It was the second rate cut this year in the Chinese special administrative region, bringing borrowing costs to their lowest level since November 2022. The decision came amid elevated unemployment despite robust GDP growth. Recent data showed that Macau’s jobless rate held at 2.0% in August, the highest since March 2024. Meanwhile, GDP grew 5.1% year-on-year in Q2 2025, the strongest expansion since Q2 2024, rebounding from a 1.3% contraction in Q1. However, the annual inflation rate accelerated to 0.47% in September, the fastest pace in eight months. Under the linked exchange rate system, Macau’s base rate is set at par with Hong Kong’s base rate, which is typically 50 basis points above the lower end of the target range for the US federal funds rate.

The Macau Monetary Authority lowered the base rate by 25 basis points to 4.50% on September 18th, 2025, following a similar move by its Hong Kong counterpart after the US Federal Reserve decided to cut interest rates. It marked the first rate cut this year in the Chinese administrative territory, bringing borrowing costs to their lowest level since November 2022, amid easing inflationary pressures. Macau's annual inflation rate eased to 0.12% in July, the slowest pace in four months. Meanwhile, the unemployment rate inched up to 2.0% in the three months ending July 2025, the highest since March 2024, rising from 1.9% in the previous period. On the other hand, the GDP grew 5.1% yoy in Q2 2025, the strongest expansion since Q2 2024, rebounding from a 1.3% contraction in Q1.