Hong Kong Also Cuts Interest Rates Following the U.S.
Hong Kong, Dollar Peg System Applied, Sudden 0.64 Percentage Point Cut
[Asia Economy Reporter Cho Young-shin] Following the United States, Hong Kong also cut its benchmark interest rate.
The South China Morning Post (SCMP) reported that the Hong Kong Monetary Authority (HKMA) lowered the benchmark interest rate by 0.64 percentage points from the previous 1.50% to 0.86% on the 16th (local time).
Hong Kong adopts the "dollar peg system (fixed exchange rate system)," where the currency value moves within the range of 7.75 to 7.86 Hong Kong dollars against the US dollar.
SCMP reported that the HKMA cut the interest rate together on the same day after the US Federal Reserve Board (Fed) abruptly lowered the benchmark interest rate on the 15th (local time) in response to the impact of the novel coronavirus (COVID-19).
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The US Fed announced on the same day that it would cut the benchmark interest rate by 1 percentage point from the previous 1.00%?1.25% to 0.00%?0.25%. The Fed also decided to purchase $700 billion (?844 trillion) worth of government bonds and other securities to expand liquidity supply.
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