HKMA leaves base rate unchanged at 5.75 percent
The Hong Kong Monetary Authority (HKMA) on Thursday retained its base rate at 5.75 percent, offering some relief to the city's home buyers and business owners. The move was in line with the US Federal Reserve's decision to keep its rates unchanged. In response to the Fed's decision, the HKMA said future interest rate decisions will depend on "incoming data, the evolving outlook and the balance of risks". “When will the Fed begin to cut rates and the interest rate path thereafter remain uncertain, and the high interest rate environment may last for some time,” it said in a statement. The authority warned that the public must carefully assess and manage the risks involved when buying property or taking out mortgages, but assured that the city's financial market remains stable and operates in a smooth and orderly manner. It added that it would continue to monitor market developments closely in order to maintain monetary and financial stability. The city's cost of borrowing remains at its highest level since December in 2007. The authority last raised its base rate in July last year. The HKMA has followed the Fed's monetary policy in lockstep since 1983 to maintain the local currency's peg to the US dollar under the city's linked exchange rate system.  Local commercial banks are expected to keep their prime rates unchanged, with HSBC taking the lead to hold its prime rate steady at 5.875 percent.