Hong Kong slashes base rates
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On November 8, the Hong Kong Monetary Authority (HKMA) lowered its base rate by 25 basis points to 5.0%, following a similar move by the US Federal Reserve after its own 50bps cut in September.
In the third quarter of 2024, the city’s GDP grew by just 1.8% year-on-year, the slowest pace in five quarters, driven by weaker private consumption and a slowdown in exports. The government had previously forecast economic growth of 2.5 to 3.5% for the year. Meanwhile, Hong Kong’s foreign exchange reserves stood at HKD 421.4 billion in October, the lowest in three months.
Hong Kong slashes base rates
As Hong Kong’s currency is pegged to the US dollar, its monetary policy adjustments align with those of the Federal Reserve. This rate cut brings borrowing costs in the city to their lowest level since February 2023, offering some relief to consumers and businesses who have struggled with high interest rates for years. These elevated rates have been a significant burden on Hong Kong’s housing market and economy.In the third quarter of 2024, the city’s GDP grew by just 1.8% year-on-year, the slowest pace in five quarters, driven by weaker private consumption and a slowdown in exports. The government had previously forecast economic growth of 2.5 to 3.5% for the year. Meanwhile, Hong Kong’s foreign exchange reserves stood at HKD 421.4 billion in October, the lowest in three months.