HKMA raises base rate by a quarter point to 4.25%, the first increase since 2023

The HKMA and US Federal Reserve lift key interest rates amid high inflation spurred by the Middle East conflict Hong Kong’s de facto central bank increased its base rate by a quarter of a percentage point on Thursday after the US Federal Reserve raised its target range for the federal funds rate to tackle inflation amid conflict in the Middle East. The Hong Kong Monetary Authority (HKMA) raised the city’s base rate to 4.25 per cent, hours after the Fed lifted the target range to between 3.75 per cent and 4 per cent after the sixth meeting of the Federal Open Market Committee (FOMC) this year. The moves marked the first rate rises by the Fed and the HKMA since July 2023, when they also increased rates by a quarter of a percentage point. “The plain fact is that inflation is too high and has been for too long,” said Kevin Warsh at a news briefing after presiding over his third FOMC meeting as Fed chairman.

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