Hong Kong Monetary Authority slashes base rate to 0.5%

Hong Kong Monetary Authority (HKMA), the city's de facto central bank, has cut the key rate from 1.5% to 0.5% yesterday from Wednesday, following the U.S. Federal Reserve surprise rate cut move.

The Fed has slashed its benchmark federal funds rate by 75 basis points to the record low range of zero to 0.25%, and in response, HKMA set the base rate at 50 basis points, 0.5% higher than the lower end of the target rate range of the Federal funds, according to the new formula announced in October.

The HKMA's base rate is the reference rate for lending to commercial banks within the territory.