The Hong Kong Monetary Authority announced that the Base Rate has been set at 4.25% with immediate effect.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On 30 October 2023, the Hong Kong Monetary Authority ("HKMA") announced that the Base Rate has been set at 4.25% with immediate effect, in accordance with a predefined formula.
The Base Rate serves as the foundational interest rate for determining Discount Rates applied in repurchase transactions conducted through the Discount Window.
The current Base Rate is determined to be the higher of either 50 basis points above the lower end of the prevailing target range for the US federal funds rate or the average of the five-day moving averages of the overnight and one-month Hong Kong Interbank Offered Rates ("HIBORs").
Following a 25-basis point reduction in the US federal funds rate target range on 29 October, the Base Rate is calculated to be 4.25% based on the 50 basis points above the new lower target rate, while the HIBOR-based average rate is 3.21%.
Consequently, the Base Rate is set at 4.25% as per the specified formula.
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