Hong Kong Sets Base Rate at 4.25% After U.S. Increase

The Hong Kong Monetary Authority set its Base Rate at 4.25% with immediate effect on Thursday after the Federal Reserve raised its target range by 25 basis points to 3.75%-4.00%. The Base Rate anchors discount rates for repurchase transactions through Hong Kong's Discount Window. Under a preset formula, it is the higher of 50 basis points above the U.S. range's lower bound or the average of the five-day moving averages of overnight and one-month HIBOR. The authority said those inputs were 4.25% and 2.50%, respectively. The Federal Open Market Committee approved its increase by a 12-0 vote.