Following the pace of the US Federal Reserve's interest rate cut, the Hong Kong Monetary Authority also announced a 0.5 percentage point cut in the base interest rate on Thursday (September 19, 2024). This is the first interest rate cut by the Hong Kong Monetary Authority in four years.

According to Ming Pao, following the Federal Reserve's announcement of a 50 basis point rate cut, the Hong Kong Monetary Authority also announced that it would cut the base interest rate by 0.5 percentage points to 5.25%, the highest level since 2007, according to a preset formula, with immediate effect. This is the first time the HKMA has cut its benchmark interest rate since 2020. This move may help ease Hong Kong's borrowing environment.

According to a statement on the HKMA's official website, the base interest rate is the base interest rate used to calculate the discount rate applicable to repurchase transactions through the discount window. The base interest rate is currently set at the lower limit of the current US federal funds rate target range plus 50 basis points, or the average of the five-day moving average of the overnight and one-month Hong Kong interbank offered rates, whichever is higher.